Toronto-based artificial intelligence (AI) scaleup Cohere has raised $100 million USD in new funding that has bumped its valuation up to $7 billion USD.
“Cohere is a leader in the generative AI space, which is key for our Canadian businesses to make significant productivity gains and for BDC as a development bank.”
Geneviève Bouthillier,
BDC
The financing comes through a second close of the $500 million USD round Cohere raised at a $6.8 billion valuation last month. The round’s investors now include the Business Development Bank of Canada (BDC) and Nexxus Capital Management. They join previously disclosed investors like AMD Ventures, Healthcare of Ontario Pension Plan (HOOPP), Inovia, NVIDIA, Public Sector Pension Investment Board (PSP Investments), Radical Ventures, and Salesforce Ventures.
“Cohere is a leader in the generative AI space, which is key for our Canadian businesses to make significant productivity gains and for BDC as a development bank,” BDC Capital executive vice president Geneviève Bouthillier said in a statement.
Cohere announced the new funding at the kick-off of AI conference ALL IN on Wednesday morning, where several company leaders are set to speak. The scale-up said it will use the extra funding to accelerate the development and global adoption of its enterprise AI technology across the public and private sectors. The firm added that it is rapidly scaling its operations across the North American, Asia-Pacific (APAC), and the European, Middle East, and African (EMEA) markets to meet increasing demand.
Cohere opened an office in Paris earlier this month to serve as the “central hub” for its EMEA operations. In recent months, Cohere has shared plans to open offices in South Korea and Montréal.
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In addition to the new funding, Cohere also announced an expanded partnership with semiconductor giant AMD. As part of the partnership, Cohere customers will have access to AMD’s Instinct GPU infrastructure for its AI offerings, and AMD will integrate Cohere’s North platform into its internal enterprise AI portfolio. Cohere has focused on growth through strategic partnerships with global enterprises, including Dell, SAP, Bell, LG, and Fujitsu.
Founded in 2019 by former Google researchers, Cohere builds the large language models (LLMs) that power chatbots and other AI applications for companies and government agencies. It faces stiff competition from larger American LLM developers like OpenAI and Anthropic that have raised more money, as well as deep-pocketed tech giants like Google and Meta that are building their own AI models. Cohere has raised about $1.6 billion USD to date and grown to 450 employees.
Reuters has reported that Cohere crossed $100 million USD in annualized revenue this May. According to The Information, Cohere has told investors that it expects to generate more than $200 million USD in annualized revenue by the end of 2025. A source familiar with Cohere’s operations confirmed to BetaKit last month that both metrics are accurate.
While both figures represent rapid growth compared to the $35 million USD in annualized revenue Cohere was on pace to bring in as of March 2024, they are reportedly far below the company’s previous sales forecasts, placing it well behind competitors OpenAI and Anthropic.
Feature image courtesy ALL IN