Cohere announced the initial close of its Series E on Thursday: up to C$7 billion (about €4.5 billion) to be raised, valuing the company at roughly C$35.7 billion (€22.9 billion) — by Cohere's account the largest private financing round a Canadian technology company has ever assembled. It is led by the Schwarz Group, the owner of Lidl and Kaufland.
The list of backers tells the real story. Bell Ventures, Bullhound Capital and the Government of Canada are new; existing investors including Inovia Capital, Nvidia and Prosperity7 are adding. Ottawa is putting in up to C$1.6 billion — with strings attached: headquarters stays in Canada, at least 1,000 new Canadian jobs by 2030, and at least C$1.7 billion of additional computing capacity built in Canada.
For Schwarz, the round extends a bet it had already placed. The retail group held more than 20% of Aleph Alpha and committed about $600 million when the Heidelberg company agreed in the spring to combine with Cohere. In practice that was a takeover: Aleph Alpha is being folded into Cohere, the brand will disappear, Heidelberg stays a research hub and Berlin becomes a second headquarters alongside Toronto. Aleph Alpha co-CEO Ilhan Scheer becomes Cohere's chief operating officer; co-founder Samuel Weinbach leads research from Heidelberg. The deal has not closed and still needs regulatory approval.
Schwarz intends to put Cohere's models directly into its own cloud, STACKIT. Christian Müller, who runs the group's IT arm Schwarz Digits, frames digital sovereignty as strategic choice, interoperability and keeping control of one's own data — and the group is separately spending €11 billion to €13 billion on a data-center campus in Germany.
Cohere puts its own growth at 165% year-on-year in annual recurring revenue for the twelve months to the end of September, with its customer base up twentyfold in a year to 300. Customers include Bell Canada, Fujitsu, PwC, the Royal Bank of Canada and the German submarine builder TKMS. The company does not disclose absolute revenue.
At the new valuation Cohere edges past Mistral, Europe's best-known AI startup, which raised €3 billion in September and has since been valued at €21 billion. Both sell the same proposition: AI that companies and governments can run in their own cloud, on their own servers or in fully isolated environments, independent of the big US providers. Against OpenAI and Anthropic, both now valued in the hundreds of billions, these remain small numbers.
The sovereignty pitch has a catch, and German observers are naming it. According to the business magazine Business Punk, Cohere is taking about 90% of the combined company — hardly a merger of equals. Germany's former AI hope becomes part of a Canadian firm whose Canadian roots Ottawa is now securing by contract. Aleph Alpha had also fallen behind technically: its in-house Kolibri model was no match for leading open-weight models, and about 50 employees had to leave at the start of the year.
