# AI Start-Up Kaon AI Raises $60 Million in Funding Round in Quest to Build a ‘Personalized Story Engine’ for Users > Source: > Published: 2026-07-08 13:00:00+00:00 [Kaon AI](https://variety.com/t/kaon-ai/), a start-up focused on building personalized story worlds powered by generative AI for its users through its products FlowGPT and [Emochi](https://variety.com/t/emochi/), has raised $60 million in its most recent funding round at a valuation in the several hundreds of millions. Investors included B Capital, Redpoint Ace, Goodwater Capital and DCM. The Berkeley, California-based company — led by CEO Jay Dang, chief technology officer Alex Xi and chief operating officer [Lifan Wang](https://variety.com/t/lifan-wang/) — is eager to create interactive experiences for users, eager to let them generate stories around their “intent, emotion and creative direction,” Wang said in an email. The move marks an apparent shift from its past work with FlowGPT, which it [envisioned](https://techcrunch.com/2024/02/26/flowgpt-is-the-wild-west-of-genai-apps/) as an “app store” for generative AI models. Emochi is Kaon AI’s flagship consumer product for interactive experiences. Wang said Kaon was focused on building a “customization engine for AI-native entertainment,” where users work with AI models to build out characters, settings and settings. The company’s model then engages with what the user lays out, responding to how they’re feeling or the story they’re trying to create, a distinction from competitors such as Character.ai that Wang said are too focused on simulating individuals. ### Popular on Variety “Kaon’s view is different,” Wang said. “We are not trying to replace human relationships; we are building a personalized story engine where users can step into worlds they help create, control and evolve.” Many users describe the experience less like “chatting with an AI,” he said, and “more like living inside an interactive story, or alternate reality that is made for them, just like a movie but personalized.” Kaon said Emochi generates $45 million in annual recurring revenue, with more than 2 million daily active users who spend an average of 150 minutes on the platform per day. The U.S. is the company’s largest market, with the median user age range between 23 and 25 years old. “Customization sets the stage; emotional responsiveness makes it feel alive,” Wang said. “The product works because users are not just consuming a story. They are directing an interactive story that remembers and adapts to them.” Daisy Cai, a partner at B Capital, said in a statement that interactive AI entertainment is the “next distinct consumer category.” “Kaon stands out because Jay, Alex and Lifan have built a full-stack powerhouse that owns its data pipeline from the ground up,” Cai said. “That level of integration creates a compounding advantage in performance, data and product iteration that is difficult to replicate, and we are excited to support the Kaon team as they help define this new category.”