Canada takes a stake in Cohere's record US$5.13B round, led by Lidl owner Schwarz

What's the deal? Toronto-based Cohere has announced the initial close of a Series E round targeting up to US$5.13B, which would value it at US$26.2B. Germany's Schwarz GroupDealroom has a profile for this one. Try Dealroom →, the owner of Lidl and Kaufland, leads the round. New backers are Bell VenturesDealroom has a profile for this one. Try Dealroom →, Bullhound CapitalDealroom has a profile for this one. Try Dealroom → and the Government of CanadaDealroom has a profile for this one. Try Dealroom →, and Inovia Capital, NVIDIA and Prosperity7 VenturesDealroom has a profile for this one. Try Dealroom → are returning. Cohere says it is the largest private financing round ever raised by a Canadian technology company.

The government takes a stake: Prime Minister Mark Carney announced that Canada will make an equity investment of up to US$1.17B, paid in stages. The government calls it "a commercial investment" made alongside private investors. In return, Cohere commits to create at least 1,000 Canadian technical jobs and spend at least US$1.25B on extra computing infrastructure in Canada by 2030, and to keep its Canadian incorporation and headquarters. The Globe and Mail calls it a direct investment in a technology company of unprecedented size.

The European angle: According to Reuters via CBC, Schwarz pledged to lead the round in April as part of Cohere's combination with Germany's Aleph Alpha. Schwarz also plans to host Cohere's models in its sovereign STACKITDealroom has a profile for this one. Try Dealroom → cloud. Carney announced the investment while welcoming EU leaders to Montreal.

The numbers: Cohere says annual recurring revenue grew 165% year on year by the end of Q3 2026, and its customer base grew 20-fold in a year to 300, including Bell Canada, FujitsuDealroom has a profile for this one. Try Dealroom →, RBC and TD Bank. Dealroom data shows the company was valued at $7 billion in September 2025, so the target price is roughly three to four times that in about a year.

What could go wrong? This is only an initial close. Cohere has not said how much has been committed so far or when the round will close, so the US$5.13B is a target, not money in the bank. Cohere is also competing for compute and talent with much larger US labs.

What they say: "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 CEO and co-founder Aidan Gomez. In a blog post, the co-founders said the money is meant to build "a frontier company outside the U.S. and China".

The signal: Sovereign AI is becoming a matter of state shareholding. A G7 government is now taking equity next to a European retailer and Nvidia to keep a national champion at home. This follows France's Mistral raising €3 billion in September.

Read more: Cohere, Prime Minister of Canada, The Globe and Mail, CBC/Reuters

Image credit: Cohere