Cohere raised $500M in its Series D round at a $5.5B valuation
Toronto-based AI startup Cohere has raised $500 million in a Series D funding round led by PSP Investments, valuing the company at $5.5 billion and highlighting its rapid growth in providing customized large language models for enterprise customers.
Cohere announced Monday it has raised a $500 million Series D funding round that places the startup at a $5.5 billion valuation. This makes Cohere one of the largest startups in Canada, and one of the most valuable AI companies worldwide. Cohere was featured in the latest edition of Forbes' annual AI 50 list, where it was also highlighted as one of the startups responsible for a sizeable chunk of the $34.7 billion raised by all the featured companies. Having raised $445 million at the time of the list's publication, Cohere landed fourth place, just behind OpenAI, Anthropic, and Mistral AI.
Canadian pension investment manager PSP Investments led Cohere's Series D, which also featured the participation of Cisco Systems, Fujitsu, AMD Ventures, Magnetar Capital, and Canada's export credit agency EDC. The funding round more than doubles the company's valuation and total financing from June last year when Cohere raised its $270M Series C round resulting in the startup being valued at an estimated $2.1 billion.
Much like OpenAI and Anthropic, Cohere is building large language models from scratch, a complex, time-consuming, and substantially expensive endeavor. However, unlike those companies, Cohere has departed from the flashy chatbot and ambitious artificial general intelligence promises, focusing its entire strategy on the practical goal of delivering reliable solutions for enterprise contexts, especially for use cases related to retrieval-augmented generation, search, summarization, and classification. Cohere's technology powers solutions for the company's diverse customer base, including Notion, Oracle, and a selection of banking, technology, and retail companies.
Cohere has quickly grown, generating $35 million in annualized revenue by the end of March, up from $13 million at the end of 2023. The company projects that it could take in more than $300 million by the year's end. Currently operating with around 250 employees, the company plans to double its workforce this year. Although Cohere already has hubs in London and San Francisco, the company plans to remain based in Toronto.
