Koah Raises $5M to Bring Advertising to AI Apps
Key Points
- Koah raised $5 million in seed funding led by Forerunner.
- Co‑founder and CEO Nic Baird targets for long‑tail AI apps, especially outside the U.S.
- Ads are already live in AI apps Luzia, Heal, Liner and DeepAI.
- Advertisers include UpWork, General Medicine and Skillshare.
- Koah reports click‑through rates of 7.5% and early partners earning $10,000 in 30 days.
- Forerunner partner Nicole Johnson calls advertising an inevitable revenue model for consumer AI.
- The platform aims to capture commercial intent within AI chat interactions.
Koah, a startup focused on monetizing AI-powered applications through advertising, announced a $5 million seed round led by Forerunner with participation from South Park Commons and AppLovin co‑founder Andrew Karam. Co‑founder and CEO Nic Baird said the company aims to serve the “long tail” of AI apps, especially those outside the United States, where subscription revenue is limited. Koah already delivers sponsored ads in several AI‑driven products, partnering with advertisers such as UpWork, General Medicine and Skillshare. The firm claims its ad format yields click‑through rates of 7.5%, delivering higher effectiveness while preserving user engagement.
Funding and Vision
Koah secured a $5 million seed investment, with the round led by Forerunner and joined by South Park Commons and AppLovin co‑founder Andrew Karam. Co‑founder and CEO Nic Baird explained that the company’s mission is to create a sustainable revenue layer for consumer AI services by embedding advertising directly into AI‑driven applications. Baird emphasized that while early AI products focused on affluent, prosumer users and subscription‑based models, a broader audience—particularly in regions outside the United States—does not typically afford high‑priced subscriptions. Advertising, therefore, becomes a crucial tool for developers seeking to offset inference costs and scale their offerings.
Current Partnerships and Deployment
Koah’s ad platform is already active in a range of AI‑focused apps. These include the AI assistant Luzia, the parenting app Heal, the student research tool Liner, and the creative platform DeepAI. Advertisers such as UpWork, General Medicine, and Skillshare provide sponsored content that appears at context‑relevant moments within user conversations. For example, when a user asks for startup strategy advice, an UpWork ad offering freelance connections may be displayed. All ads are clearly marked as sponsored to maintain transparency.
Advertising Effectiveness
The company reports that its ad solution is “4 to 5 times more effective” than traditional mobile ad networks, delivering click‑through rates of 7.5%. Early partners have reportedly earned $10,000 in revenue within the first 30 days of using Koah’s platform. Baird notes that the ad format is designed to complement, rather than disrupt, the user experience, aiming to improve engagement by delivering relevance‑driven promotions.
Industry Perspective
Forerunner partner Nicole Johnson described monetization as “the elephant in the room” for AI builders and investors. She argued that relying solely on subscription models can quickly lead to user fatigue and churn, positioning advertising as an inevitable component of the AI economy. Johnson highlighted Koah’s role in building an essential monetization layer that could unlock new possibilities for “vibe‑coded” applications that might otherwise be too expensive to operate at scale without additional funding.
Strategic Position in the Purchase Funnel
Baird explained that AI chat interactions sit in the middle of the purchase funnel—between awareness‑building ads on platforms like Instagram and the final purchase decision that often occurs on search engines such as Google. Users typically seek recommendations or product details from a chatbot and then transition to a web search to complete a transaction. Koah’s strategy focuses on capturing that commercial intent within the chat experience, rather than merely displaying generic display ads.