The federal government will invest up to $1.6 billion in Toronto-based Cohere, as part of a Series E of up to $7 billion that would be the biggest funding round a Canadian startup has ever raised, BetaKit reports. The money comes through the Canada Development Investment Corporation, the Crown corporation that manages government holdings, and it’s separate from the planned $500-million Canadian Tech Growth Fund.
The round values Cohere at $35.7 billion, The Logic reports. Cohere says it has secured most of its target and announced an initial close, but hasn’t said how much is committed.
What Cohere has to do in return
- stay incorporated and headquartered in Canada
- spend at least $1.7 billion on new computing infrastructure in Canada by 2030
- create more than 1,000 tech jobs here by 2030
The federal money is paid in stages tied to milestones. AI Minister Evan Solomon told BetaKit that “jobs and revenue targets are key,” but the government hasn’t published the terms, the size of its ownership stake or whether it gets a board seat.
Who else is in
| Role | Investors |
|---|---|
| Lead | Schwarz Group (Germany) |
| New | Government of Canada, Bell Ventures, Bullhound Capital |
| Returning | Inovia Capital, Nvidia, Prosperity7 Ventures |
For scale, the previous records were Clio’s $1.24 billion in 2024 and Waabi’s US$1 billion in January, The Logic notes. Cohere’s last round, in 2025, raised US$600 million at a US$7-billion valuation.
Why Ottawa says it’s doing this
Prime Minister Mark Carney announced the investment in Montreal. “The most powerful AI systems are concentrated in a very small number of companies, in a very small number of countries,” he said, adding that this “carries risks: to cost, to resilience and to sovereignty.”
It isn’t Ottawa’s first bet on Cohere. In 2024 the government pledged up to $240 million toward a $725-million computing project at a data centre in Cambridge, Ont., with Cohere as the anchor tenant. Its annual recurring revenue was up 165% from a year earlier at the end of the third quarter, The Logic reports, with about 300 business customers, including RBC, TD, Bell and Fujitsu.
Why it matters: This is public money taking a direct stake in one private AI company, and Solomon says it won’t be the last. The conditions on headquarters, jobs and computing spend are the public’s return. Until Ottawa publishes the milestones, there’s no way to check whether they’re met.