Canadian AI startup Cohere reportedly raises $450 million

The funding marks a surge in valuation from Cohere’s last private raise, when it was valued at $2.2 billion

Canadian AI startup Cohere has raised $450 million in funding from returning investors like Nvidia and Salesforce Ventures, as well as new investors including Cisco and Canadian pension fund PSP Investments, according to a source familiar with the matter.

This concludes the first part of Cohere’s months-long fundraising efforts, while the firm is still in talks to raise more in the same round at $5 billion valuation, according to the source, speaking on condition of anonymity.

The funding marks a surge in valuation from Cohere’s last private raise, when it was valued at $2.2 billion from investors including Inovia Capital last June.

The generative AI company, which sells its models and applications to enterprises with an emphasis on data privacy, generated $35 million in annualized revenue by the end of March, up from $13 million last year, the source added.

Cohere was set out to raise between $500 million to $1 billion, Reuters reported earlier. It competes with OpenAI, Anthropic and Mistral, which have also raised billions of dollars from strategic investors like Microsoft, Google and Amazon.

Foundation model AI firms have been racing to raise capital to fund the expensive development of AI models that require huge amounts of computing power and top industry talent.

One of the most high-profile Canadian startups, Cohere is likely to benefit from the Canadian government’s plan to invest C$2.4 billion ($1.77 billion) to fund compute and AI research for homegrown AI firms.

Founded in 2019, Cohere builds large language models – software systems that are trained on large amounts of data and can generate text. Unlike OpenAI’s tie-up with Microsoft, it has steered clear of exclusive deals with cloud providers, despite being backed by Oracle.