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Canadian artificial intelligence (AI) start-up, Cohere, has raised $270m to develop generative AI applications for the enterprise market.
Generative AI has seen unprecedented consumer adoption with OpenAI’s ChatGPT registering 100 million active users within two months of its launch in November 2022. Meanwhile, the enterprise market is on the cusp of identifying generative AI business use cases for efficiency and cost savings as well as enhanced productivity.
Why it matters
Cohere’s $270m series C funding round, from established investors, demonstrates that the generative AI market is rapidly maturing. The funding round included investment from corporations including Salesforce and Oracle highlighting the technology’s potential within the enterprise market.
Research analyst GlobalData expects the global AI market to grow from $81bn in 2022 to $909bn by 2030, with a compound annual growth rate of 35%. According to the analyst, generative AI is the fastest growing of all AI technologies.
Cohere already has a customer base as it targets the enterprise market which is significant, according to GlobalData thematic research director, Josep Bori.
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“Generative AI is no longer just the territory of research labs. These technologies are here to stay and increasingly they will be embedded in more of the products and services we use,” says Bori.
Cohere’s AI platform provides large language models for the enterprise market, making it easy to incorporate language capabilities to any product, from interactive chat features, to automatic generation of product descriptions or blog posts. Other important functionality includes the improvement of search by understanding meaning and customer intent.
According to Bori, Cohere AI’s offering is perfectly placed for enterprise customers as it supports many deployment options including public cloud, private cloud and on-premise data use and storage as well as providing reliable customer support.
The generative AI market has seen rapid development over the last few years and Cohere’s origin story demonstrates as much. The company was founded in 2019 by Canadian computer science academics and Google alumni.
The start-up saw an 800% increase in usage between its series A funding round, announced in September 2021, and its series B funding round announced in February 2022.
In November 2021, Cohere partnered with Google Cloud to gain access to its cloud infrastructure to scale user numbers while minimising upfront costs. OpenAI has a similar partnership with Microsoft, which invested $10bn in the ChatGPT maker in January 2023.
The series C funding round was led by Inovia Capital with a cross section of global investors including corporations NVIDIA, Oracle and Salesforce Ventures as well as investors DTCP, Mirae Asset, Schroders Capital, SentinelOne, Thomvest Ventures, and returning investor Index Ventures. The latest round demonstrates wider investor confidence in generative AI technology with the expectation that investment is set to increase.
The company’s latest funding round brings the total raised to about $445m and is said to give the Toronto-based company a valuation of around $2.2bn.