AI Startup Cohere Raises $500 Million at $5.5 Billion Valuation

AI Startup Cohere Raises $500 Million at $5.5 Billion Valuation

Toronto-based AI company Cohere has raised $500 million in a Series D funding round, pushing its valuation to $5.5 billion. This surge in value makes Cohere one of the world's most valuable AI firms and a standout in Canada's tech scene.

Unlike some of its Silicon Valley rivals, Cohere hasn't built a viral chatbot or flashy consumer app. Instead, it's focused on creating large language models for businesses - a strategy that's paying off.

"We're not out there chasing AGI," says Nick Frosst, one of Cohere's co-founders. "We're building models that solve real problems for enterprises."

This practical approach has won over hundreds of corporate clients, including Notion Labs and Oracle. These companies use Cohere's tech for tasks like writing website copy, improving customer communication, and adding AI features to their own products.

Canadian pension fund PSP Investments led the funding round, with new backers including Cisco Systems, Fujitsu, AMD Ventures, and Canada's export credit agency EDC joining in. This fresh capital more than doubles Cohere's valuation from last year and brings its total funding to $970 million.

Cohere stands out in the AI world as one of the few startups building massive language models from scratch. Its competitors include heavyweights like OpenAI, Anthropic, and Google.

CEO and co-founder Aidan Gomez, known for co-authoring the influential "Attention Is All You Need" paper, has rapidly grown the company since its 2019 launch. This spring, Cohere released its most powerful model yet, Command R+, aiming to compete with rivals like OpenAI at a lower cost.

The company's growth is impressive. By the end of March, Cohere was generating $35 million in annual revenue, up from $13 million at the end of 2023. It plans to double its 250-person workforce this year.

Cohere's client base spans various industries, from banks to retailers. Its models work in 10 languages, including English, Spanish, Chinese, Arabic, and Japanese. New customer Toronto-Dominion Bank will use Cohere's AI to analyze financial documents and answer questions.

As Cohere expands globally with offices in San Francisco and London, it remains committed to its Toronto headquarters. "Toronto's been a great place to build a global company," Frosst says, highlighting the city's growing tech scene.

Chris McKay is the founder and chief editor of Maginative. His thought leadership in AI literacy and strategic AI adoption has been recognized by top academic institutions, media, and global brands.

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