Toronto-based artificial intelligence (AI) startup Cohere, an established competitor of OpenAI, recently announced a substantial $270 million in Series C financing. This funding round aims to promote the widespread adoption of generative AI by businesses worldwide.
Reports indicate that the funding round was spearheaded by Inovia Capital, receiving further support from an array of other venture capital firms and strategic investors from around the globe. This diverse group includes renowned tech giants like Nvidia and Oracle, along with Salesforce Ventures, DTCP, Mirae Asset, Schroders Capital, SentinelOne, Thomvest Ventures, and Index Ventures.
Funding and Valuation
The company’s Series C round follows approximately 16 months after securing $125 million in Series B funding. Earlier this year, there were reports that Cohere was in talks to raise hundreds of millions of dollars in a round that could value the startup at over $6 billion. However, recent findings from Bloomberg and VentureBeat suggest a more modest valuation of over $2 billion, as initially reported by The Globe and Mail.
Generative AI: The Future of Business
Cohere aims to facilitate businesses in adopting generative AI. Despite a cooling broader tech market, the generative AI sector has been heating up. Popular AI models such as ChatGPT and DALL-E have both achieved viral status, underscoring the potential and challenges of these new technologies and significantly increasing investor interest in the sector.
Nvidia founder and CEO Jensen Huang announced, “We are at the beginning of a new era driven by accelerated computing and generative AI.” He praised Cohere for its “foundational contributions to generative AI” and stressed the firm’s crucial role in assisting businesses globally in leveraging the technology’s capabilities.
A Promising Vision for AI’s Next Phase
“As the early excitement about generative AI shifts toward ways to accelerate businesses, companies are looking to Cohere to position them for success in a new era of technology,” said Cohere co-founder and CEO Aidan Gomez. “The next phase of AI products and services will revolutionize business, and we are ready to lead the way.”
About Cohere
Founded in 2019 by former Google researchers, Cohere specializes in developing natural language processing (NLP) software powered by large language models for developers and businesses. Its platform enables the generation or analysis of text for numerous applications, including content creation, moderation, data classification, and information extraction.
Cohere offers a unique value proposition to businesses by enabling the deployment of NLP capabilities across organizations without the need for supercomputing infrastructure or specialized AI expertise. This revolutionary approach “radically reduces the cost for companies of all sizes to access leading AI models.”
Future Plans
The capital will primarily be allocated toward purchasing computing resources and the expansion of the team. The funding will also help strengthen Cohere’s position in the enterprise sector, with a particular focus on offering data-secure deployment options in clients’ existing cloud environments. These enhancements aim to provide greater customization and superior customer support, bolstering the company’s overall offerings.
A Strategic Advantage
Driven by a mission to remain a neutral AI provider, Cohere offers businesses the ability to use models not tied to specific cloud providers like Microsoft or Alphabet’s Google. “We’re independent. We did not and would not take a huge check from a single company, especially not a single cloud provider, because we think that would constrain us from doing the right things for our business and our enterprise customers,” said Martin Kon, President at Cohere.
Impressive Global Presence
Despite being a relatively young startup, Cohere already boasts a strong global presence, with significant connections to Europe and Germany. For instance, Martin Kon, President & COO, boasts German and British nationality in addition to American and Canadian citizenship, having started his career working in Germany. Similarly, CEO Aidan Gomez is of Spanish, British, and Canadian heritage. Nils Reimers, Director of Machine Learning and the creator of the sentence transformer (SBERT), spearheads semantic search at Cohere from Darmstadt.
Further evidencing its international reach, Cohere inaugurated its London-based office in November 2022 under the leadership of Chief Scientist Phil Blunsom, who founded and led DeepMind’s language team before joining the startup.
Investor Interest in AI Startups
The impressive funding secured by Cohere underlines the growing investor interest in AI startups. Since the launch of ChatGPT in November, technology capable of generating prose, imagery, or computer code on command, AI startups have emerged as a beacon of hope in an otherwise subdued venture capital funding market. This is partly due to rising interest rates and an increased focus on profitability among investors.
Conclusion
Looking ahead, Cohere’s significant Series C funding underscores the potential of generative AI in reshaping the global business landscape. As companies worldwide become more invested in leveraging AI, it will be interesting to watch how Cohere and its competitors navigate this new terrain.
