AI start-up co-founded by ex-Google researchers raises $500 million
Toronto-based generative AI start-up, Cohere, has successfully secured a whopping $500 million in its latest funding round. The company, which was co-founded by former Google researchers, received this substantial sum from a diverse group of investors. These include tech giants Cisco and AMD, Japanese MNC Fujitsu, Canadian pension investment manager PSP Investments, and Canada's export credit agency EDC.
Valuation skyrockets to $5.5 billion
This recent funding round has more than doubled Cohere's valuation, catapulting it to an impressive $5.5 billion from its previous valuation in June, when it secured $270 million from Inovia Capital and others. The total amount raised by the company now stands at a staggering $970 million. Josh Gartner, head of communications at Cohere, stated that this financing sets the company up for "accelerated growth."
Expansion plans for next-gen enterprise AI
Cohere is planning to expand its technical teams to build the next generations of accurate, data privacy-focused enterprise AI. Gartner added that the company aims to lead the AI industry beyond esoteric benchmarks, and deliver real-world benefits in daily workflows of global businesses across regions and languages. Earlier this year, Reuters reported that Cohere was seeking around $500 million and $1 billion for its next round of fundraising.
Unique approach to generative AI
Cohere, launched in 2019 by Aiden Gomez, Nick Frosst, and Ivan Zhang, stands out from its rivals with a unique business model. Unlike other generative AI start-ups such as OpenAI, Anthropic, and Mistral which focus on consumers, Cohere customizes its AI models for companies like Oracle, LivePerson, and Notion. Its models do tasks such as summarizing documents, writing website copy, and powering chatbots.
Cloud-agnostic AI platform and tailored models
Cohere's AI platform is cloud agnostic, meaning it can be deployed inside public clouds like Google Cloud or Amazon Web Services, a customer's existing cloud, virtual private clouds, and on-site. The company works closely with customers to create tailored models based on their proprietary data. In addition to its commercial operations, Cohere runs a nonprofit research lab, called Cohere for AI, and releases open models like multilingual models for understanding and analyzing text.
Cohere's revenue growth and strategic partnerships
Cohere's strategy has proven successful as it generated $35 million in annualized revenue at the end of March, a significant increase from the $13 million at the end of 2023. The company's partnership with Google Cloud continues to be beneficial, as Google provides cloud infrastructure to train and run Cohere's models. Additionally, Cohere maintains close ties with Oracle, which is not only an investor but also a customer; Cohere's AI is integrated into many of Oracle's software products.
