AI startups are growing faster than they’re finding revenue—Koah is betting ads are the fix.
The San Francisco-based company, which embeds sponsored ads directly into AI chatbots, has raised $20.5 million in a Series A round led by Theory Ventures. Tomasz Tunguz, founder and general partner of Theory Ventures and a Google AdSense veteran, also became a member of the board as a part of the investment.
The funding brings Koah’s total to more than $26 million as it looks to position itself as a monetization layer for generative AI, building a platform similar to Google’s AdSense—which lets website publishers monetize their sites with targeted ads—but designed for AI.
“A lot of our friends were building consumer AI apps, and they couldn’t make money,” co-founder and CEO Nic Baird told ADWEEK. “We looked into subscriptions, paywalls, usage based stuff, tokens and credits and gamification. But at the end of the day, we came to the conclusion that the most scalable and simple way for most people to do this is with sponsorships”
Founded in September 2024 and formally launched as a two-sided marketplace earlier in 2025, Koah connects developers building AI apps with advertisers looking to reach users inside conversational interfaces.
As AI companies grapple with the high cost of running large models, monetization has emerged as one of the sector’s biggest unresolved questions. Subscription models can be difficult to scale, especially for consumer apps competing for attention. That has led to bigger players like OpenAI to facilitate ads inside ChatGPT. Smaller players like Perplexity too have tinkered with ads while OpenAI’s rivals like Anthropic have taken an anti-ads approach to monetize its flagship product Claude. [link to previous reporting in this graf]
With fresh funding, Koah plans to expand its engineering team, build out analytics tools and new ad formats, including brand-sponsored polls (such as Hulu), aiming to offer a more engaging alternative to standard search ads.
Monetizing the chatbot moment
Koah’s pitch hinges on a shift already underway: people are beginning to search, compare, and make decisions inside AI tools rather than traditional search engines or social feeds.
