Cohere, the Toronto artificial-intelligence developer, completed the first close of a funding round targeting as much as 7 billion Canadian dollars, about US$5 billion, in the largest private financing ever raised by a Canadian technology company. The round would value Cohere at C$35.7 billion.
Germany’s Schwarz Group, the owner of the Lidl and Kaufland retail chains and a major investor in European cloud infrastructure, is leading the round. New investors include Bell Canada’s venture arm, Bullhound Capital and the Government of Canada, while Nvidia Corp., Inovia Capital and Prosperity7 Ventures, an arm of Saudi Aramco, are returning.
Ottawa takes equity
The federal government is committing up to C$1.6 billion, a rare direct equity stake in a private company that Prime Minister Mark Carney’s government has cast as a national AI champion. The money will be paid out as Cohere meets conditions: spending C$1.7 billion on computing infrastructure in Canada by 2030, keeping its headquarters in the country and doubling its staff.
Cohere’s chief financial officer said the round was oversubscribed relative to the company’s original plan, which is why the books remain open. Earlier talks contemplated raising up to US$3 billion at a US$20 billion valuation. A year ago, the company was valued at roughly US$7 billion.
Selling sovereignty
Cohere sells AI models and agent software to banks, telecom carriers, health systems, energy companies and governments, pitching itself as an independent alternative to U.S. and Chinese developers. It agreed in September on terms to merge with Aleph Alpha, a German AI company backed by Schwarz, and this month agreed to buy Prague cybersecurity startup Aisle. It told investors earlier this year that it had reached an annualized revenue rate of about US$240 million in 2025.
The money will go to compute, model development and global expansion. Cohere remains far smaller than OpenAI and Anthropic, which already generate billions of dollars a year from corporate customers, and its models trail the leaders on several technical benchmarks.
