- Cohere raises $450 million from investors including Nvidia, Salesforce Ventures, Cisco, and PSP Investments, according to Reuters.
- The funding boosts Cohere’s valuation to $5 billion, a substantial rise from $2.2 billion last June.
- Cohere’s annualised revenue surged to $35 million by March, up from $13 million the previous year.
OUR TAKE
Despite the boosting development Cohere has made, its need to continuously raise significant capital to fund AI model development and attract top industry talent highlights the high-risk nature of the business. If investor interest wanes, it could pose challenges for Cohere.
–-Dudu, BTW Reporter
Canadian AI startup Cohere secures major funding in a competitive market.
Major investors drive Cohere’s valuation to $5 billion
Cohere, a Canadian AI startup, has successfully raised $450 million from prominent investors such as Nvidia, Salesforce Ventures, Cisco, and Canadian pension fund PSP Investments. According to a source familiar with the matter who requested anonymity, this marks the first tranche of its ongoing fundraising efforts, which aim to reach a total of up to $1 billion. The company’s valuation has now jumped to $5 billion, compared to $2.2 billion during its last private raise in June 2023, Reuters reported.
Also read: Nvidia and Salesforce boost AI startup Cohere in $450M round
Also read: Hitachi signs $18.9B generative AI partnership with Microsoft
Significant revenue increase amid competitive landscape
Cohere, which generates revenue by selling AI models and applications with a strong emphasis on data privacy, has seen its annualised revenue soar to $35 million by the end of March, up from $13 million last year. This revenue growth is critical for the company as it competes with other major players like OpenAI, Anthropic, and Mistral in the generative AI space. These competitors have also secured substantial investments from tech giants such as Microsoft, Google, and Amazon.
Cohere poised to benefit from government investment
As one of Canada’s most high-profile AI startups, Cohere stands to benefit from the Canadian government’s commitment to invest C$2.4 billion ($1.77 billion) in computing and AI research for homegrown companies, according to Reuters. Founded in 2019 and headquartered in Toronto, Cohere specialises in building large language models—software systems capable of generating text from large datasets. Unlike OpenAI, which has an exclusive partnership with Microsoft, Cohere has avoided exclusive deals with cloud providers, despite being backed by Oracle.
