Photo credit: Cohere via BetaKit

Cohere, a Toronto-based artificial intelligence startup co-founded by former Google researchers, has raised $500 million to boost its foundation for building large language models.

The company secured the latest capital injection through a Series D funding led by Canadian pension investment manager PSP Investment, Bloomberg reported on July 22. The round also had participation from the country’s export credit agency EDC, alongside a list of additional new investors, including Cisco, Fujitsu, and ADM Ventures.

The latest funding reportedly values the startup at $5.5 billion, more than double its valuation from June 2023 when it secured $270 million from Inovia Capital and others, and brings its total capital raised to $970 million.

Talks about Cohere’s plans to raise capital at a valuation of $5 billion surfaced earlier this year. In March, Reuters reported that the Canada-based firm’s annualized revenue run rate grew to $22 million this month from $13 million in December last year.

Founded by ex-Google researchers, the AI company pitched its potential for growth to investors by highlighting its focus on developing AI models tailored for businesses. Additionally, the company plans to expand its reach by making its models accessible on other major cloud platforms.

In a LinkedIn announcement, the company revealed its plans to utilize the fresh capital injection to bolster its team and “take our frontier, enterprise-grade AI technology to the next level,” to enhance productivity and drive growth for businesses.

Cohere, founded in 2019 by AI luminary Aidan Gomez and his co-founders, has rapidly become a key player in the field of natural language processing. Gomez, co-author of the “Attention Is All You Need” research paper, has led Cohere to develop powerful language models like Command R+, designed to rival competitors like ChatGPT-maker OpenAI while offering a more cost-effective solution.

Cohere’s latest funding comes as institutions flushed with cash continue to bet on the revolutionary technology, particularly in generative AI and artificial general intelligence, or AGI, AI software capable of performing human-level tasks.

Earlier this year, OpenAI completed a deal, valuing it at over $80 billion. The Microsoft-backed company, in recent times, had set an ambitious target for building AGI technologies.

According to PitchBook, AI startups have been driving venture capital deals in both the United States and Europe.

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