Koah Secures $5M to Integrate Targeted Ads in AI Apps
Koah Secures $5M to Integrate Targeted Ads in AI Apps
Monetizing AI applications has been a persistent challenge for startups and developers, especially as AI adoption spreads beyond early tech hubs. Koah, an emerging startup, has just raised $5 million in seed funding to tackle this issue by introducing targeted advertising into AI-powered apps.
Why Ads in AI Apps?
While AI-generated ads are common across the web, most AI chatbots and tools have remained ad-free. Nic Baird, Koah’s co-founder and CEO, believes this is bound to change as AI apps go mainstream globally. According to Baird, "Once these things get outside San Francisco, there’s only one way to make [them profitable] on a global scale. It’s happened time and time again."
Koah isn’t aiming for giants like ChatGPT but is focused on the broader ecosystem of AI-powered apps—especially those serving users outside the US. In many regions, subscription models often fall short as users are less likely to pay high monthly fees. As Baird explains, developers still face the same operational costs, making alternative monetization crucial.
How Koah’s Solution Works
Koah serves ads in apps such as AI assistant Luzia, parenting app Heal, student research tool Liner, and creative platform DeepAI. Advertisers include UpWork, General Medicine, and Skillshare. These ads are presented as sponsored content and are designed to appear at relevant moments in the user’s chat. For example, a user seeking business advice could see an UpWork ad offering freelance support tailored to their needs.
Koah’s approach is to make ads so relevant they enhance the user experience rather than disrupt it. Baird claims Koah’s platform is 4 to 5 times more effective than older adtech solutions, delivering an impressive 7.5% clickthrough rate and enabling early partners to earn up to $10,000 in their first 30 days.
Backed by Leading Investors
The recent seed round was led by Forerunner, along with South Park Commons and AppLovin co-founder Andrew Karam. Nicole Johnson, Forerunner partner, summarized the opportunity: "Monetization is the elephant in the room amongst builders and investors" in AI. Subscription fatigue is a real risk, and Johnson believes ads will inevitably become a core revenue stream for consumer AI apps.
Fitting into the Advertising Ecosystem
Baird points out that AI chat interactions represent the middle of the purchase funnel—users gather information or seek recommendations, but purchases typically happen elsewhere. The challenge for Koah is to capture this commercial intent and present ads that are genuinely helpful, rather than simply displaying generic banners.
The Future of AI Monetization
As AI apps continue to scale globally, sustainable monetization is top of mind for founders and investors alike. Koah’s targeted ad solution could be the missing link that enables a wider range of AI-powered apps to thrive without relying solely on subscriptions or venture funding.
