Cohere Targets CAD $7B Series E, Canada Takes Equity Stake in Record AI Raise

Cohere has announced the initial close of a Series E funding round targeting up to CAD $7 billion, a record-setting raise that would value the Toronto-based artificial intelligence company at CAD $35.7 billion and mark the largest private financing round ever undertaken by a Canadian technology company.

The Canadian government is putting up to $1.6 billion into the round, taking a direct equity stake in a firm it has positioned as a strategic national asset. The financing is the largest-ever by a Canadian startup and, once completed, would make Cohere the country's most valuable privately held technology company.

The round was led by the companies of Schwarz Group, the German retail giant that is one of Europe's largest investors in AI and cloud infrastructure. New institutional and strategic investors include Bell Ventures, Bullhound Capital and the Government of Canada, while returning backers include Nvidia Corp., Montreal's Inovia Capital and Prosperity7 Ventures, an arm of Saudi Aramco.

**Sovereign AI pitch**

Cohere, which develops large language models and software systems for regulated industries and governments, sells its technology as a sovereign alternative to offerings from U.S. and Chinese developers. The company has made many of its recent AI models open source and touts the control and privacy features of its platform.

"Today we are announcing the initial close of our Series E, a record-setting round that marks the largest private capital raise in Canadian history," said Aidan Gomez, CEO and co-founder of Cohere, in a statement. "This is a huge honour, not only for Cohere but for the country as the government's investment highlights Canada's leadership in the global AI revolution."

The government's direct equity investment is notable both for its size and because Cohere competes in the capital-intensive AI industry, where profits have been elusive. The deal is part of Ottawa's strategy to build out and secure Canada's AI strengths and economic sovereignty.

Prime Minister Mark Carney, announcing the investment at a press conference Thursday, called the round a "vote of confidence" in both Cohere and Canada.

"Under this agreement, Cohere will stay Canadian," Carney said.

**Commitments and conditions**

To secure Ottawa's investment, Cohere has committed to spend $1.7 billion on the buildout of compute infrastructure in Canada by 2030 and to remain headquartered in the country. The firm has also agreed to double its workforce, which will exceed 1,000 staff following its planned merger with German AI company Aleph Alpha GmbH.

AI Minister Evan Solomon said in an interview that the federal investment was made on "very favourable commercial terms" and will be paid out based on Cohere reaching its hiring and infrastructure commitments.

"This company is absolutely critical," Solomon said. "In the world of AI, we need to make sure that Canada has a building place at the table."

Cohere chief financial officer Francois Chadwick said in an interview that the financing is necessary for the company to invest in compute infrastructure, develop its AI models and expand globally.

"Canada needs to be there at the forefront," Chadwick said. "Instead of having two global leaders – China and the U.S. – Canada becomes a global leader in the AI world."

**Growth and competition**

Cohere has seen rapid growth since launching North, its agentic AI platform, ending Q3 2026 with 165% year-over-year annualized recurring revenue growth. Over the past year, the company has increased its global customer base 20-fold to 300 customers, including Aston Martin Aramco, Bell Canada, Fujitsu, RBC, RWS, PwC, TD Bank and TKMS, according to the company.

Chadwick said investor demand exceeded expectations, leading the company to keep the round open.

"We started with some original figures on what we were looking to raise," he said, adding: "Because we were oversubscribed on our original thinking, we've kept the investment open, and we will be looking to close soon."

The financing would significantly boost Cohere's valuation from roughly US$7 billion in a round last September. The Globe and Mail first reported last month that Cohere had told investors it was in advanced talks to raise as much as US$3 billion at a valuation of US$20 billion.

Cohere faces stiff competition in its chosen market of AI tools for large private and public sector organizations. OpenAI and Anthropic already generate billions of dollars in revenue from such customers, while many businesses are switching some AI tasks to cheaper models, often from Chinese developers, to contain costs.

The company sells its technology as a sovereign alternative to that of U.S. and Chinese developers, and is developing customized tools for highly regulated and sensitive industries such as financial services, telecommunications, health care and energy.

Christian Müller, CEO of Schwarz Digits, the IT and digital division of Schwarz Group, said in a statement that the investment marks "the next logical milestone" following the strategic business combination of Cohere and Aleph Alpha.

"Our partnership brings together Canadian AI leadership and trusted European infrastructure, giving customers greater choice and control over how they deploy secure AI," Müller said. "Our clear goal is to anchor these frontier capabilities in our sovereign STACKIT cloud infrastructure."

Karsten Wildberger, Germany's Federal Minister for Digital Transformation and Government Modernization, congratulated Cohere on the round, saying it "demonstrates strong market confidence in the strategic importance of sovereign AI and in the shared vision of Cohere and Aleph Alpha to strengthen technological competitiveness through trusted, secure, and independent AI capabilities."