Cohere, a generative AI startup co-founded by ex-Google researchers, has raised $500 million in new cash from investors, including Cisco, AMD, and Fujitsu.
Valuation and Investment
According to Bloomberg, the round also had participation from Canadian pension investment manager PSP Investments and Canada’s export credit agency EDC, which values Toronto-based Cohere at $5.5 billion. That’s more than double the startup’s valuation from June 2023, when it secured $270 million from Inovia Capital and others, and brings Cohere’s total raised to $970 million.
Accelerated Growth
Josh Gartner, head of communications at Cohere, told TechCrunch that the financing sets Cohere up for “accelerated growth.” “[W]e continue to significantly expand our technical teams to build the next generations of accurate, data privacy-focused enterprise AI,” Gartner said.
Fundraising Goals
According to Reuters, Cohere was seeking to nab between $500 million and $1 billion for its next round of fundraising and was in talks with Nvidia and Salesforce Ventures to raise the money. Both Nvidia and Salesforce contributed, Gartner confirmed in an email to TechCrunch.
Cohere Founding and Background
Aiden Gomez launched Cohere in 2019 along with Nick Frosst and Ivan Zhang, with whom Gomez had researched at FOR.ai, a sort of progenitor to Cohere. Gomez is one of the co-authors of a 2017 technical paper, “Attention Is All You Need,” that laid the foundation for many of the most capable generative AI models today, including OpenAI’s GPT-4 and Stability AI’s Stable Diffusion.
Enterprise Focus
Unlike OpenAI, Anthropic, Mistral, and many of its generative AI startup rivals, Cohere doesn’t have a big consumer focus. Instead, the company customizes its AI models, which perform tasks such as summarizing documents, writing website copy, and powering chatbots for companies like Oracle, LivePerson, and Notion.
Cohere Cloud Agnostic Platform
Cohere’s AI platform is cloud agnostic, able to be deployed inside public clouds (e.g., Google Cloud, Amazon Web Services), a customer’s existing cloud, virtual private clouds, or onsite. The startup takes a hands-on approach, working with customers to create tailored models based on their proprietary data.
Nonprofit Research and Open Models
Cohere also runs a nonprofit research lab, Cohere for AI, and releases open models, such as multilingual models for understanding and analyzing text. Its latest flagship model, Command R+, is designed to deliver many of the capabilities of more expensive models (e.g., GPT-4) while costing less.
Revenue and Customer Base
Cohere’s strategy has proven to be a winning one, even as OpenAI and Anthropic ramp up their respective enterprise sales efforts. At the end of March, according to Bloomberg, Cohere was generating $35 million in annualized revenue with a customer base of hundreds of companies, up from around $13 million at the end of 2023.
Cohere Future Endeavors
Generative AI at Cohere’s scale is costly, mainly because the company wants to train more sophisticated systems. The new tranche will surely help, as will Cohere’s ongoing partnership with Google Cloud, wherein Google provides cloud infrastructure to train and run Cohere’s models.
