Cohere, the Toronto company that builds AI models and software for businesses and governments, said on October 29 that it had completed the initial close of a Series E round targeting up to C$7 billion (about US$5.0 billion) at a valuation of C$35.7 billion (about US$25.5 billion). The companies of Schwarz Group, the German owner of the Lidl and Kaufland chains, lead the round, and the Government of Canada committed to an equity investment of up to C$1.6 billion.
Ottawa's commitment equals about 23% of the target, by SaasBuzz's calculation. The money will come in stages, tied to promises that include at least 1,000 new Canadian jobs and C$1.7 billion of computing infrastructure in Canada by 2030. The valuation is about 3.6 times the roughly US$7 billion Cohere announced in September 2025.
How much is in so far
Cohere's release, issued at 11:45 a.m. ET, did not say how much the initial close raised or when the round will close. BetaKit reported, citing a company spokesperson, that Cohere "has secured most of the target funding." Chief Financial Officer Francois Chadwick told The Globe and Mail that demand had run ahead of the plan: "Because we were oversubscribed on our original thinking, we've kept the investment open, and we will be looking to close soon."
In September, the Globe reported, citing four sources, that Cohere was in advanced talks to raise US$2 billion to US$3 billion at a US$20 billion valuation. The release says the full C$7 billion "would represent" a C$35.7 billion valuation, which Cohere told BetaKit is post-money, meaning it includes the new cash. On that basis, C$1.6 billion is about 4.5% of the valuation. Neither Ottawa nor Cohere has said what share the government will hold.
Bell Ventures, the venture arm of Bell Canada, Bullhound Capital and the government are new investors, the release says. Inovia Capital, NVIDIA (Nasdaq: NVDA) and Prosperity7 Ventures are returning. Bell Canada is also among the Cohere customers the release names.
Cohere said in April that Schwarz would lead the Series E with a €500 million structured financing commitment, about C$780 million at the Bank of Canada's October 29 rate. Ottawa's commitment is about twice that; the October 29 release gave no figure for Schwarz. Christian Müller, CEO of Schwarz Digits, the group's IT and digital division, said in the release that the aim is "to anchor these frontier capabilities in our sovereign STACKIT cloud infrastructure."
What Ottawa gets, and what Cohere promised
The Prime Minister's Office called the stake "a commercial investment," to be made in stages with regular reporting on Cohere's progress. As part of the deal, Cohere will:
Create at least 1,000 new high-paying Canadian technical jobs by 2030
Commit at least C$1.7 billion to additional computing infrastructure in Canada by 2030
Keep its incorporation and headquarters in Canada
Invest in Canadian research partnerships and opportunities for students and recent graduates
Keep working with the Canadian AI Safety Institute
Evan Solomon, Canada's minister of artificial intelligence and digital innovation, told BetaKit the money will come through the Canada Development Investment Corporation, a Crown corporation that manages assets for the government. BetaKit reported that the investment is separate from the planned C$500 million Canadian Tech Growth Fund announced in June. He said the stages are tied to milestones and declined to give their terms, except that "jobs and revenue targets are key."
The stake differs from Ottawa's earlier support. In March 2025, Innovation, Science and Economic Development Canada finalized up to C$240 million toward a C$725 million Cohere project to add AI computing capacity in Canada. The new commitment is nearly seven times as large, and it buys equity. Prime Minister Mark Carney, who announced it in Montréal on the first day of the Canada-European Union Summit, made the case for ownership in the government's release:
It is in all our interests for Cohere to succeed, and now all Canadians will have a share in that success.Mark Carney, Prime Minister of Canada, in the government's release, October 29, 2026
Cohere's valuation, round by round
Measured in US dollars, Cohere's valuation has risen about 3.6 times in 13 months.
Date | Amount | Led by | Valuation |
|---|---|---|---|
Aug 2025 | US$500M | Radical, Inovia | US$6.8B |
Sep 2025 | US$100M | Second close | About US$7B |
Oct 2026 | C$7B target | Schwarz Group | C$35.7B |
Source: Cohere's announcements of August 14, 2025, September 24, 2025, and October 29, 2026. Radical Ventures and Inovia Capital led the 2025 round. Canadian dollars convert at the Bank of Canada's October 29 rate of C$1.3985 per US dollar.
Cohere gave growth rates but no revenue: annual recurring revenue rose 165% from a year earlier as of the end of the third quarter of 2026, and the customer count grew 20-fold over the past year to 300, the company said. Cohere told investors in February that it had reached an annualized revenue rate of US$240 million in 2025, the Globe reported; Chadwick declined to give the paper a current figure.
What the money is for
Chadwick said in the release that the money will "advance our modelling and product roadmap," build AI products for specific regulated industries and pay for the long-term computing capacity needed to train frontier-level enterprise models.
In an essay on Cohere's blog, the three co-founders, Chief Executive Aidan Gomez, Ivan Zhang and Nicholas Frosst, set out the next 12 months: complete the combination with the German AI developer Aleph Alpha and the purchase of the cybersecurity company AISLE, launch a cyber-defense system called Cohere Cyber for air-gapped (cut off from outside networks) and classified environments, release the next generation of Cohere's models and "begin frontier-scale training with allied partners." They also argued that a company outside the United States and China can compete at the top of the field:
We don’t have to accept a future of AI run by just a few, and we shouldn’t want one.Aidan Gomez, Ivan Zhang and Nicholas Frosst, Cohere's co-founders, on the company's blog, October 29, 2026
What a state shareholder means for Cohere, its buyers and rivals
For Cohere, Ottawa's money comes with conditions on where the company grows. Cohere will keep its incorporation and headquarters in Canada, and the C$1.7 billion it has promised to spend on Canadian computing by 2030 is slightly more than the government's entire stake. "Under this agreement, Cohere will stay Canadian," Carney said at the announcement, the Globe reported.
For customers, the conditions bear on the question Cohere's sales pitch turns on: who controls the vendor. Cohere says its software lets organizations "own, operate and govern their AI systems," and the government has now attached Canadian incorporation and headquarters to its investment, while the lead investor plans to host Cohere's models on its own cloud in Europe.
Ottawa will also be both owner and buyer. In August 2025 the government signed a memorandum of understanding with Cohere to explore using its technology across the public service, and federal departments have since awarded the company some small pilot contracts, the Globe reported. Neither release says how the government will handle buying from a company it is investing in.
For rivals, the round adds capital and a state anchor to a company the Globe described as much smaller than the leaders in Silicon Valley. The paper wrote that OpenAI and Anthropic already earn billions of dollars from business and government customers, and Anthropic's IPO filing showed US$16.3 billion of revenue in the first half of 2026. The Globe also reported that Cohere's models lag OpenAI's and Anthropic's on coding and cybersecurity in industry rankings, a gap Gomez has acknowledged. The founders' answer, in their essay, is that the contest also runs on narrower "domain frontiers" such as cyber defense, and that work there feeds back into Cohere's general models.
Canada is not the only government buying directly into AI companies. On October 28, the Korean AI chip designer FuriosaAI announced a US$620 million Series D in which South Korea's National Growth Fund, whose investment the Financial Services Commission announced in May, committed KRW 370 billion, about US$280 million by FuriosaAI's conversion. The fund's share comes to about 45% of the round; Ottawa's commitment is about half that share of Cohere's target, but about four times as much money.
