Cohere opens a Series E of up to C$7 billion, with Ottawa committing up to C$1.6 billion

Cohere, the Toronto-based developer of large language models for businesses and governments, said on October 29 that it had completed the first close of a Series E round targeting up to C$7 billion. The company puts its valuation at C$35.7 billion. Bloomberg, as cited by The Next Web, described the round as worth up to US$5 billion at a pre-money valuation of US$20.5 billion. The Financial Post called it the largest private capital raise in Canadian history.

Who is investing

The round is led by companies of Germany's Schwarz Group. New investors include Bell Ventures, Bullhound Capital and the Government of Canada, while existing backers Inovia Capital, Nvidia and Prosperity7 Ventures are returning. Cohere has not said how much of the target is already committed; its chief financial officer, Francois Chadwick, indicated that the first close accounts for most of it.

Prime Minister Mark Carney announced the federal stake in Montreal. Ottawa will invest up to C$1.6 billion (Bloomberg's figure is up to US$1.14 billion) on a commercial basis alongside the private investors, according to the Financial Post. According to BetaKit, the equity investment was negotiated through the Canada Development Investment Corporation, a Crown corporation, and will be paid out in stages, with Cohere reporting regularly on jobs and investment in Canada. BetaKit notes it is likely the largest single equity commitment the Canadian government has made to a technology company. AI minister Evan Solomon said further government stakes in tech firms would follow.

What the money is for

Cohere says it will use the capital to create more than 1,000 technical jobs, build models and products for regulated industries, and pay for the computing power needed to train frontier models. As part of the arrangement with Ottawa, it has committed to at least C$1.7 billion in new computing infrastructure in Canada by 2030 and to keeping its headquarters in the country.

Context

The raise follows Cohere's acquisition of German AI startup Aleph Alpha, completed in September, and comes as Canada published a national security strategy that lists AI among its priority sectors. The Next Web reports that Cohere's annual recurring revenue grew by more than 165% in the year to the end of September and that it now has 300 customers; these are company figures, not independently verified. The final size of the round will depend on how much of the remaining target Cohere secures in later closes.