AI Startup Cohere Taps Banks for Fresh Fundraising Round

Liana Baker and Katie Roof, Bloomberg News

The Cohere AI website on a smartphone arranged in New York, US, on Wednesday, Aug. 16, 2023. Founded in 2019, Cohere builds large language models, software trained on massive swaths of the internet to analyze and generate text, and customizes them for users. Photographer: Gabby Jones/Bloomberg , Bloomberg

(Bloomberg) -- Artificial intelligence startup Cohere, backed by investors including Oracle Corp. and Nvidia Corp., is working with banks to raise a fresh round of financing, just a few months after its last one, according to people familiar with the matter.

Toronto-based Cohere is being advised by JPMorgan Chase & Co. and Goldman Sachs Group Inc. on the potential round, the people said, asking not to be identified because the matter is private.

Talks are early and details of the round, such as what amount the company is seeking, haven’t been set.

Cohere, a competitor to OpenAI, raised $270 million in June from a mix of investors at a valuation of up $2.2 billion, Bloomberg News reported. The company is seeking a higher valuation in the current round, one of the people said.

Representatives for Cohere, JPMorgan and Goldman Sachs declined to comment. People familiar with the Cohere’s thinking said that, even with the last round being oversubscribed, the company hopes that hiring bankers will make the fundraising process more efficient.

While many tech startups have seen their values fall and have been forced raised funds at reduced valuations, AI-focused companies are riding a wave of interest in the technology. Tel Aviv-based AI21 Labs announced Wednesday that it has raised capital from investors including Nvidia and Google at a $1.4 billion valuation.

Founded in 2019, Cohere builds large language models — software trained on massive swaths of the internet to analyze and generate text – and customizes them for users. Companies can use its models to do things like summarize customer emails or help write website copy.

Cohere co-founder and Chief Executive Officer Aidan Gomez previously worked at Google, where he was a co-author of a 2017 landmark paper in AI research titled Attention is All You Need, which led to advances in the ways computers analyze and generate text.

The Information reported on Aug. 22 that Tiger Global Management was close to selling a stake in Cohere in a deal that would have valued the company at about $3 billion.

(Updates with AI21 funding round in sixth paragraph)