Cohere Secures Funding from Nvidia, Reaches Valuation of $2.2 Billion
- ByStartupStory | June 9, 2023
Cohere, an AI foundation model company that competes with OpenAI, backed by Microsoft, recently announced a successful funding round that raised $270 million. Prominent investors in this round include Nvidia (NVDA.O), Oracle (ORCL.N), and Salesforce (CRM.N) Ventures.
In a confirmation of the previously rumored funding, the Toronto-based AI startup, Cohere, revealed that it has secured substantial financial support. The company specializes in developing AI models for enterprise clients. Although Cohere did not disclose its specific valuation, insiders familiar with the matter estimate its value to be around $2.2 billion.
Foundation models are advanced AI systems that undergo training on extensive datasets, enabling them to learn and perform various tasks. Generative AI, on the other hand, leverages the power of computer code that has processed enormous amounts of data to create outputs resembling human creations. Cohere, led by former prominent AI researchers from Google, specifically aims to establish itself as an impartial provider, offering enterprises access to models that are independent of cloud providers such as Microsoft.
“We’re independent. We did not and we would not take a huge check from a single company, especially not a huge check from a single cloud provider, because we think that would constrain us from doing the right things for our business and our enterprise customers,” Martin Kon, president at Cohere, said in an interview.
With the newly acquired funding, Cohere plans to allocate the funds towards acquiring computing resources and expanding its workforce, according to Kon, the company’s spokesperson. The introduction of ChatGPT in November, a technology capable of generating prose, imagery, or computer code on demand, has garnered significant interest from investors. Amidst a relatively lackluster venture capital funding market marked by rising interest rates and investor emphasis on profitability, AI startups have emerged as a promising area of investment.
Inovia Capital, a Canadian investment firm, took the lead in Cohere’s funding round, which also saw participation from notable investors including DTCP, Mirae Asset, Schroders Capital, SentinelOne (S.N), and Thomvest Ventures. Earlier this year, Reuters had reported that Cohere was aiming to raise a substantial amount, potentially valuing the startup at $6 billion. However, Kon, the spokesperson for Cohere, refrained from commenting on the matter. Startups focusing on foundation models have been engaged in a competitive race to secure funding, as the development of large language models necessitates significant computational resources and top-tier engineering talent.
“If you look at other AI companies in the foundation LLM spaces, everyone’s valuation is crazy,” said Umesh Padval, venture partner at Thomvest, referring to large language models (LLM).
“This was actually the most affordable if you compare the revenue to the valuation, one of the best bargains in a very highly priced market.”
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