- Cohere is in advanced talks to raise $2B to $3B at a $20B valuation, per the Globe and Mail.
- The deal would nearly triple its $7B valuation from a year ago, with Ottawa and Berlin also in talks.
- It would rank as the largest private Canadian funding round on record, if the deal closes.
Cohere is chasing a valuation that would put it in a different league, and Ottawa and Berlin might help write the check.
The Toronto-based AI company is in advanced talks to raise between $2 billion and $3 billion at a $20 billion valuation, according to four sources cited bythe Globe and Mail. Two of the sources said the deal could close as soon as next week, though the timing could slip: Cohere chief executive Aidan Gomez is scheduled to appear at three major corporate events that week, including Montreal’s All In AI expo, and any of them could delay signing. Cohere disclosed its fundraising target to investors on a call last month, one source said, with non-government money expected to cover most of the round.
That lines up with what’s already public: Schwarz Group, the German retail group behind Lidl and Kaufland, agreed in April to commit $600 million as lead investor in Cohere’s Series E, the same round now being reported at $20 billion.
A repricing built on government money
If it closes on those terms, the round would nearly triple the $7 billion valuation Cohere reached in September 2025, and it would be the largest funding round on record for a private Canadian startup, according to the Globe and Mail. It’s also the second time in five months a $20 billion figure has attached itself to Cohere, following its merger with Germany’s Aleph Alpha.
Ottawa’s willingness to keep funding Cohere isn’t new. The federal government committed up to $240 million in December 2024 toward a domestic AI data centre for the company, and this year’s national AI strategy added a $500 million Canadian Tech Growth Fund that can take direct equity stakes in the most promising Canadian AI firms. Germany’s reported interest extends the same sovereignty logic across the Atlantic, building on Schwarz Group’s commitment.
Cohere was founded in 2019 by Gomez, Ivan Zhang and Nick Frosst. Gomez and Frosst are both former Google Brain researchers, and Gomez co-authored the 2017 paper that introduced the Transformer architecture behind most of today’s generative AI. Zhang, a University of Toronto dropout who worked as a backend engineer before co-founding the company, is now its chief technology officer.
The sovereign AI trade has two anchor players now
Cohere sells almost exclusively to enterprises and governments that want to run AI models on their own infrastructure, unlike OpenAI or Anthropic. Its customers include Royal Bank of Canada, Fujitsu, Oracle and Notion, and the company told investors in February it closed 2025 with roughly $240 million in annual recurring revenue.
That pitch is worth more by the month, as governments hunt for alternatives to US cloud providers. Cohere isn’t alone in cashing in on it: Mistral closed a €3 billion round at a €21 billion valuation earlier this month, led by Samsung, making it Europe’s most valuable private AI company. Investors are increasingly treating Cohere and Mistral as the same trade — sovereign alternatives to the US giants, built on enterprise contracts and government backing instead of consumer scale.
The gap to those giants is still enormous. OpenAI and Anthropic are both valued in the hundreds of billions, and Chinese labs such as DeepSeek and Z.ai add a second front of competition neither Cohere nor Mistral has to answer to yet. A $20 billion valuation won’t close that gap. It would just mean Cohere no longer has to explain the size of the one it’s in.
