David Fano’s Teal announced it raised $7.5 million in its Series A round. The AI job search platform is expanding into larger career coaching services.
Teal, ©Bjorn Iooss 201
With diverse work experiences in brand strategy, event planning and promoting workplace culture, Lakshmi Renegarajan, always found it difficult to identify performance metrics to put on her CV. (This is despite the fact that the Chicago native should know how to pack things — she has a master’s from Northwestern in marketing communications.)
“It was always an insecurity of mine,” she says. Then she read a LinkedIn post by Teal about how to measure results from a job that, at face value, doesn’t have hard metrics. Realizing how her resume missed some of those experiences, she decided to check out Teal and run her resume and a job description through its job matching algorithm.
It was helpful, she says, but what really impressed her was when she won a sweepstakes for a free, normally $9-a-week Teal premium account and started using the AI interview coach. The software asks questions based on job descriptions for specific roles and then gives the interviewee feedback based on their answer and resume. “It kept pushing me to quantify and measure my accomplishments,” she says. “It really made me dig my career.”
These examples were essential during her interview for a remote event management position at a large technology company, where she will start in a few weeks. “People are paying much more attention to your results and your ability to work with people during interviews,” she says. “I definitely felt more prepared because Teal kept asking me for examples.”
The AI Interview Trainer is part of Teal’s latest premium offerings, announced today. The company also said today that it has raised $7.5 million in Series A funding, co-led by CityLight Capital and Flybridge, with participation from Rethink Capital Partners and Lerer Hippeau. Both are part of the company’s push to become the ultimate career “copilot” that stays with job search users throughout their career journeys—like human career coaches, but at a fraction of the price.
“We’re not for the solopreneur and we’re not for the entrepreneur,” says David Fano, founder and CEO of Teal. “We’re for the entrepreneur, for the employee who wants to be an employee and doesn’t want to feel boxed in by what the company is dictating for them.”
Fano started Teal in 2019 with the mission of helping workers take charge throughout their careers. But pandemic-fueled unemployment and the rise of AI forced the former head of growth at WeWork to rethink Teal’s initial offerings. He decided to first build a job search tool that would help job seekers with the first steps of an application.
“It’s harder to convince someone outside of that job search moment to take out their credit card and sign up for a service that will help you further your career,” says Ben Lerer, managing partner at Lerer Hippeau. , an investor in Teal.
Today, Teal’s offerings have grown to include help with cover letters, job matching, AI interview preparation, and salary and benefit comparisons. A million people signed up to use Teal last year, doubling its customer base, but most of them don’t pay. And while Teal isn’t profitable yet (Fano says that’s not their primary goal at this point), the company brought in $4.2 million in revenue in 2024.
“The big vision for Teal is to give people a copilot for their entire career,” adds Lerer. “Thinking not just about getting a job, but about growing in that job and knowing when to ask for growth.”
The overall AI career coaching industry has grown in popularity in the past year, but is still relatively small, HR practice Gartner said Forbes in August it was still too small to measure it on its own – and largely dominated by employer-centred offers. Companies like BetterUp, Valence and Multiverse offer AI career training packages to companies who can then offer them to their employees. While a cheaper and faster alternative to traditional career coaching, access to the program is usually lost when an employee leaves the company.
Last year was tough for job seekers, who were unemployed for an average of 23.3 weeks in December, up from 19.4 in December 2022, according to the Bureau of Labor Statistics. But the start of the year is already looking brighter: Nearly two-thirds of employers are looking to hire full-time workers in the first half of 2025, according to recruiting firm Robert Half, and 77% of CEOs expect the economy to to improve in the coming months and 58% of people worldwide are planning to look for a job in 2025, according to LinkedIn.
Teal hopes the flood of job seekers will mean more users of his services, especially paid ones. In a market flooded with applications, bragging about interview preparation or career coaches can be the key to standing out from other candidates. A survey by another AI job search firm, EarnBetter, found that 25% of its free users are willing to pay for job search services. Of those who paid, 37% spent $100 on all job search services, while 10% spent over $500.
“Consumers thought the dollars they had allocated for career growth were for content,” says Fano. “Now I’m paying for the tools and things they give [you] leverage, and that these tools belong to them (and not their employer).
The challenge for Teal is finding those willing to pay; most of its customers still rely on its free version, which gives users unlimited resume and job tracking options, but a limited amount of “AI credits.” Fano says 5% of users opt for its premium version within the first 24 hours of membership, which at $9 per week offers more analytics tools and email templates. The new AI interview and job comparison tools are also only available to premium users.
It’s a tough road to monetize consumer AI apps, Lerer admits, especially when a startup is competing with free options like ChatGPT or employer-provided platforms that are free for workers.
“This has not been a consumer payment category,” he says. “So if you’re going to pay, the product should be 95% or 100% of the work.”