Cohere: Democratizing Generative AI Across Industries
A leading enterprise AI solution founded by alums of Google’s cutting-edge “Brain Team”
Alumni Ventures’ portfolio company Cohere has developed an adaptable API that empowers companies of all sizes to enhance their workflows with NLP. The company was founded by leading AI researchers from Google and has attracted support from several established VCs and enterprise partners in the AI space.
One-Size-Fits-All NLP Model
Natural language processing (NLP) has rapidly evolved from a data puzzle for computer scientists into a powerful everyday tool for writing, coding, and reasoning. Since the 1950s, developers have been workshopping AI models that teach computers how to think and create like humans. Now, platforms like ChatGPT have democratized the power of NLP, bringing it to more than 100 million users.
Access to NLP solutions has proven challenging for many companies. Training and deploying large language models can cost millions of dollars, and a persistent talent shortage has further complicated the ability to sustain AI initiatives.
“[Cohere] is among the few start-ups prepared to compete with the creator of ChatGPT.”
Cade Metz | Technology Reporter, The New York Times
Source: Cade Metz, “Generative AI Start-Up Cohere Valued at About $2 Billion in Funding Round,” The New York Times, May 2, 2023
Why Alumni Ventures Invested in Cohere
Managing Partner Todd McIntyre highlights some of the reasons we decided to invest in Cohere. He discusses the company’s world-class leadership team of ex-Googlers, potential to meet the growing market demand for natural language processing, and partnerships with established VCs and enterprises focused on advancing AI technology.
See video policy below.
Cohere has developed a scalable solution that allows companies to incorporate NLP into their existing applications without any internal knowledge of machine learning or data science. Cohere develops general-purpose language models and grants access through an API. The company enables customers from small businesses to enterprises to easily implement pre-trained models or customize them for their specific use cases.
Cohere provides a range of NLP offerings, including text generation, summarization, classification, and retrieval across more than 100 languages (in contrast to OpenAI’s single-language support). Some potential applications include:
- Chatbots
- Digital personal assistants
- Content moderation systems
- Sentiment analysis tools
- Original content
What We Liked About the Company
- Home
Deeply Experienced Leadership Team
Cohere was co-founded by Aidan Gomez and Nick Frosst, both of whom made significant contributions to AI research while working at Google. The duo has recruited a deeply technical team from YouTube, Oxford, and Google. - Home
Significant NLP Market Potential
The capabilities of natural language processing have advanced significantly and rapidly.* Cohere is well-positioned to fulfill the growing market demand for NLP solutions, which is projected to reach $341.5 billion by 2030.** - Home
Established Industry and Investment Partnerships
Cohere has partnered with leading cloud providers and secured several beachhead enterprise customers. Additionally, Cohere has attracted capital from established VCs and enterprises focused on advancing AI technology (see below to learn more).
Our Co-Investors In Cohere
Index Ventures is a London-based, multi-stage VC firm that invests in e-commerce, fintech, mobility, gaming, AI, and security companies. Cohere’s $40 Million Series A in 2021 was led by Index Co-Founder Mike Volpi, a multi-time Midas List investor. He was previously an influential executive behind significant growth at Cisco Systems.
Inovia Capital is a Montreal-based, multi-stage VC firm that invests in B2B and B2C SaaS companies and marketplaces. Inovia’s lead partners for Cohere’s recent growth round are Steve Woods and Patrick Pichette, both industry veterans in the enterprise NLP sector who served long tenures as leaders at Google.
Nvidia is a GPU developer for AI, HPC, gaming, creative design, autonomous vehicles, and robotics. On May 30, 2023, the company reached a $1 trillion valuation, driven largely by demand for its AI chips and systems.
Oracle is one of the world’s largest providers of database software and technology, cloud-engineered systems, and enterprise software products. Oracle is rolling out AI and machine learning capabilities across its applications and provides cloud computing services to several promising AI startups.
Salesforce is a cloud-based software company for sales, service, and marketing teams. The company recently announced new AI-enhanced products, including generative AI features offered by Slack (which was acquired by Salesforce for $27.7 billion in 2020).
How We’re Involved
Spike Ventures (for the Stanford community) sponsored AV’s investment in Cohere’s $270 million Series C led by Inovia, which valued the company at more than $2 billion. This opportunity was a natural fit for our network-powered investing model, with a shared alumni connection between Spike and Index Co-Founder Mike Volpi (a three-time Stanford graduate).
Several AV siblings funds also participated in the round:
- Congress Avenue Ventures (for the UT Austin community)
- Towerview Ventures (for the Duke community)
- Westwood Ventures (for the UCLA community)
- The Yard Ventures (for the Harvard community)
- AI Fund (AI, machine learning, and big data solutions)
- Total Access Fund (our broadest, most diversified fund)
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Contact [email protected] for additional information. To see additional risk factors and investment considerations, visit av-funds.com/disclosures.
*Ross Gruetzemacher, “The Power of Natural Language Processing,” Harvard Business Review, April 19, 2022
**Rachita R, Vineet K, “Global Natural Language Processing (NLP) Market Opportunity Analysis and Industry Forecast, 2020-2030,” Allied Market Research, March 2022