Palona raises $20M in funding to bring AI automation to brick-and-mortar businesses
Artificial intelligence startup Palona AI, which is building an intelligence operating layer for physical businesses, is ready to show what it can do after closing on a $20 million round of early-stage funding today. The Series A round, which included converted simple agreements for future equity, was led by Ardenwood Ventures and saw participation from […] The post Palona raises $20M in funding…
Artificial intelligence startup Palona AI has secured $20 million in Series A funding to bring its AI automation technology to brick-and-mortar businesses. Led by Ardenwood Ventures, the round saw participation from CrimsonOx, UpHonest, Turbo, Llama Ventures, Neo, Fusion Fund, Defy and Maynard Webb.
Palona AI, formerly known as Proactive AI Lab Inc., launched out of stealth in January 2025 after raising $10 million in seed funding. The company's technology goes beyond traditional customer service chatbots, as it aims to assist physical businesses by understanding what's happening in real-time and coordinating actions across teams, software systems, and AI agents.
At the heart of Palona's technology stack is a multimodal agentic operating layer, which uses a proprietary "capture, understand, act, learn" system and a patented Interaction Model for Physical AI. This model combines vision AI and object detection to comprehend people, places, objects, and processes in a business environment, allowing for real-time decision-making and workflow optimization.
Palona's initial focus is on the restaurant industry, offering a suite of tools including Revenue Expansion, Revenue Intelligence, and Operations Intelligence. These tools include autonomous AI agents that can automate various business operations. For example, an ordering agent can handle missed phone calls and route orders to a restaurant's point-of-sale system, while a catering agent can manage inquiries.
The Operations Intelligence tool connects to security cameras to monitor the premises for food safety and cleanliness, sending alerts to managers when issues arise.
Founder and CEO Maria Zhang emphasizes that physical businesses have been left behind by the AI revolution because they need systems that can understand and act on real-time data. Palona's technology has already shown success at the Cali BBQ restaurant chain, where it helped increase revenue by over 20% during Father's Day and became the primary sales channel for lucrative catering orders.
Zhang notes that before Palona, unanswered calls represented lost demand, but now the company can convert those conversations into orders and identify new catering opportunities.
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