Candian AI startup Cohere is reportedly in late-stage discussions to raise a new round of funding, which would value the company at $5bn. 

The AI startup is looking to raise over $500m and is expected to include major investors from Cohere’s $270m Series C funding round in 2023, according to Bloomberg, citing a person familiar with the matter. 

Toronto-based Cohere, founded in 2019, builds large language models and customises them for specific customer needs. Cohere’s models are primarily used by organisations to help with day-to-day operations, such as writing copy or summarising customer emails and documents. 

Cohere has been growing fast and was reportedly generating $22m in annualised revenue as of March. 

The potential deal is the latest in the GenAI race that has seen companies invest millions into the emerging technology.

According to research and analysis company, GlobalData, total venture capital raised in 2023 totalled $224bn, marking a 65% decline from the record-breaking $655bn in 2021.

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However, the GenAI sector defied the trend, with a 110% surge in venture capital, accumulating a staggering $10bn in investment, according to the company.

Adarsh Jain director of the financial markets team at GlobalData, said: “The slowdown in startup funding, referred to as ‘startup winter’, was attributed to escalating interest rates, recessionary risks, and a challenging macro environment.”

“Despite these challenges, the substantial funding acquired by GenAI startups underscores the groundbreaking nature of the technology, its widespread applicability, and its transformative potential across various sectors and industries,” he added.

Breaking down the funding landscape, GenAI startups in the US have dominated with a 75% share, securing $16bn since 2018.

Startups in Israel, Germany, France, the UK, and China followed closely, contributing an additional 15% to the share.

Early-stage startups led the way, constituting 40% of all deal volumes, followed by seed-stage startups at 37%.