The seed round is the initial capital calling stage, where startups raise money to turn ideas into feasible products or services, prove market demand and build initial teams, preparing for larger capital calling rounds later.
Koah CEO Nic Baird believes that AI advertising is often rough, while chatbots have almost no ads. He predicted that this will change, especially with AI applications aiming outside the US, where users find it difficult to accept a subscription fee of $20/month.
Unlike ChatGPT, Koah focuses on the development of consumer AI applications. The company has distributed ads on platforms such as Luzia assistant, Heal parenting app, Liner learning tool, and DeepAI creative platform. Advertising customers include: UpWork, General Medicine and Skillshare. Advertisements are tailored with sponsored content and cleverly inserted into the dialogue, for example, when users ask about a startup, they can see an ad linking to freelancer from UpWork.
According to Baird, many publishers have doubted the effectiveness of AI advertising, but Koah achieved a whopping 7.5%, 4-5 times higher than the old solution, helping partners earn 10,000 USD in just the first month. He believes that the goal is to make the advertisement relevant enough to increase interaction instead of causing trouble.
Koah's Capital Round is led by Forerunner, along with South Park Commons and co-founder of AppLovin Andrew Karam. Nicole Johnson - Forerunner's partner commented: the subscription model is not sustainable enough, users are easily tired and leave the service. According to her, advertising will become an essential money-making layer for consumer AI, just like the role it has had on the Internet for decades.
Baird added that AI chats are most suitable for the mid-channel stage, helping users refer and consider before they make a decision to buy on platforms like Google. Koah's challenge was to exploit that commercial intention properly.
