Cohere Closes Initial $7B Series E, Largest Canadian Startup Raise, Backed by Ottawa and Schwarz Group

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

The round is led by the companies of Schwarz Group, the German retail giant and 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. Returning investors committing to the round include Inovia Capital, NVIDIA, and Prosperity7 Ventures.

The Canadian government is putting up to $1.6 billion into Cohere as part of the financing, an unprecedented move to take an equity stake in a firm it has positioned as a national AI champion, according to The Globe and Mail. The round was also reported to include funding from Bell Canada's venture arm and Luxembourg-based Bullhound Capital.

"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 financing underscores a broader global shift toward sovereign AI, as organizations seek independent alternatives that provide greater control over data, infrastructure, governance, and deployment environments. Cohere sells its technology as a sovereign alternative to U.S. and Chinese developers, touting the control and privacy features of its models, many of which it has made open source.

**Government investment and commitments**

Prime Minister Mark Carney announced the investment at a press conference on Thursday, calling the round a "vote of confidence" in both Cohere and Canada. Under the agreement, Cohere has committed to remain headquartered in the country.

"Canada's investment in Cohere is an investment in choice, in security, and in our ability to live our lives as we choose," Carney said in a statement. "Today, true sovereignty depends on our ability to build, adopt, and govern AI on our own terms."

To secure Ottawa's investment, Cohere has committed to spend $1.7 billion on the buildout of compute infrastructure in Canada by 2030, according to The Globe and Mail. The firm has also agreed to double its workforce as part of the federal deal; Cohere will have over 1,000 staff following its merger with Germany's Aleph Alpha GmbH, a deal announced in September.

The Honourable Evan Solomon, Minister of Artificial Intelligence and Digital Innovation, said the federal investment sends a message that Canadian entrepreneurs "should not have to leave Canada to build a company that succeeds around the world." Ottawa's investment was made on "very favourable commercial terms" and will be paid out based on Cohere reaching its hiring and infrastructure commitments, Solomon said in an interview with The Globe and Mail.

**Growth and use of proceeds**

Cohere has seen rapid growth since launching North, its agentic AI platform, ending Q3 2026 with 165% year-over-year annualized recurring revenue (ARR) 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.

"Cohere will use the funding to advance our modelling and product roadmap, develop fully verticalized AI solutions for regulated industries, and invest in long-term compute infrastructure needed to train frontier-level enterprise models," said Francois Chadwick, Chief Financial Officer of Cohere, in a statement.

Chadwick told The Globe and Mail that investor demand exceeded original expectations. "We started with some original figures on what we were looking to raise," he said. "Because we were oversubscribed on our original thinking, we've kept the investment open, and we will be looking to close soon."

**Schwarz Group's strategic role**

Christian Müller, CEO of Schwarz Digits, the IT and digital division of Schwarz Group, framed the investment as a milestone in a roadmap uniting European research with global enterprise scale. "Digital sovereignty is about strategic choice, interoperability and holding the keys to our own data," Müller said in a statement. "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, calling it evidence of "strong market confidence in the strategic importance of sovereign AI."

The financing significantly boosts Cohere's valuation, which stood at roughly US$7 billion in a round last September, according to The Globe and Mail. The company faces stiff competition from OpenAI and Anthropic in the market for AI tools serving large organizations, and is much smaller than those Silicon Valley leaders. Cohere told investors in February it had reached an annualized revenue rate of US$240 million in 2025.