Ottawa takes up-to-$1.6 billion stake in Cohere funding round

Ottawa will invest up to $1.6 billion in Cohere, a company founded in Toronto that builds secure AI systems for businesses and governments. The money buys the government a stake in a Series E round, a funding round in which a private company sells shares to investors. Cohere said the round targets up to $7 billion at a $35.7 billion valuation, and calls it the largest private financing ever by a Canadian technology company. Cohere said Schwarz Group, the German owner of the Lidl and Kaufland retail chains, is the lead investor.

BetaKit reported that Evan Solomon, the federal minister, said the money flows through the Canada Development Investment Corporation, a Crown corporation that manages assets for the government. It will be paid in stages, with regular reporting on Cohere’s progress against its commitments. Those include at least 1,000 new Canadian technical jobs by 2030 and at least $1.7 billion of extra computing infrastructure in Canada by 2030. Cohere must also keep its Canadian incorporation and headquarters.

BetaKit reported that Cohere has more than 800 employees. For context, Statistics Canada says Toronto’s professional, scientific and tech jobs rose from 249,000 in 2006 to 532,000 in 2024, up 11% from 479,000 in 2023.

In 2024, BetaKit reported, Ottawa awarded Cohere up to $240 million for an AI data centre through its Sovereign AI Compute Strategy. The new commitment is far larger.

Cohere describes itself as headquartered in Toronto, with offices in cities including Berlin, Montreal and San Francisco. Cohere said that, under its combination with Germany’s Aleph Alpha, it plans to have headquarters in both Berlin and Toronto. That deal has not closed and remains subject to final regulatory approvals.

Sources: Prime Minister of Canada · BetaKit · Cohere Inc · Trending Topics · Statistics Canada · Cohere