VC Masterclass: The Explosive AI Company With a Huge Niche
Cohere is redefining the AI stack with enterprise focus, capital discipline, and true differentiation
At Alumni Ventures, we invest in the builders shaping the next generation of transformative technology. When we first evaluated Cohere, we weren’t just looking at growth metrics — we were examining a differentiated approach in one of the most competitive markets in tech. This is the story of why we backed a company that’s quietly become one of the fastest-growing names in AI.
Cohere is one of the fastest growing enterprise software companies ever — doubling revenue since January 2025 and now surpassing $100M in ARR, just 2.5 years after its first revenues. in. All without a consumer chatbot or a billion-dollar war chest.
The Canadian company specializes in enterprise AI — offering companies tools using natural language processing (NLP) and large language models (LLMs) to derive insights from enterprise data. Cohere’s platform supports use cases like chatbots, semantic search, content generation, and data analysis — making advanced language AI accessible even to businesses without in-house AI teams.
Unlike many players in the LLM arms race, Cohere isn’t chasing hype. That starts with Co-Founder and CEO Aidan Gomez — widely recognized as an AI pioneer and co-author of the seminal 2017 Google Brain paper that introduced the transformer architecture behind ChatGPT. While others raced for consumer buzz and media attention with viral chatbots, Gomez and his team focused on a less crowded but arguably larger opportunity: enterprise-focused AI built for real-world business needs.
That focus is paying off. Cohere’s roster of customers and partners includes Salesforce, McKinsey, Cisco, NVIDIA, SAP, Oracle, and Dell. A significant share of its revenue comes from highly regulated industries like finance, healthcare, and government — sectors where trust, control, and performance are critical.
How Cohere Competes with Giants Like OpenAI and Google
Cohere’s strategy is a masterclass in enterprise-first differentiation.
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Enterprise-first, privacy-forward go-to-market
No chatbots, no consumer apps — Cohere is 100% focused on serving B2B buyers. Customers can also opt out of data sharing for model training, giving enterprises more control and peace of mind. - Home
Data sovereignty by design
Cohere models can deploy in private Virtual Private Clouds or fully on-prem. This makes the technology viable even for highly regulated sectors. - Home
Cloud-agnostic flexibility
While OpenAI and Anthropic are tethered to Azure and AWS respectively, Cohere’s models are not tethered to one cloud — the company partners broadly across all hyperscalers (Azure, Google Cloud, and AWS). This gives CIOs freedom to choose — and helps future-proof against vendor lock-in. - Home
Capital efficiency without compromise
Domain-specific models make Cohere’s systems more efficient to train and run. The result: 80%* gross margins without raising billions — a rare feat in foundational AI. - Home
Best-in-class, enterprise-grade AI models
Cohere offers native support for 100+ languages and its flagship language models can handle long documents (up to 128,000 tokens), are optimized for retrieval-augmented generation (RAG), and ready for custom fine-tuning. It also offers high-accuracy search and ranking across enterprise data — delivering top-tier performance on industry-standard benchmarks. Additionally, it enables mid-market access, with lightweight variants that run on as few as 2 GPUs
Inflection Point in the AI Market
Roughly every 10–15 years, a new platform redefines how humans interact with technology. First it was the PC, then the internet, then mobile. Today, that platform is AI — and more specifically, natural language interfaces that let anyone interact with machines through plain, conversational language. Cohere is not just participating in this shift — it’s helping shape it.
According to a recent McKinsey report, generative AI could unlock $3–$4 trillion annually across industries, from automating customer support to accelerating drug discovery and streamlining software development. But realizing that potential at scale depends on one thing: whether enterprises can deploy GenAI models that are accurate, private, and flexible enough to meet their infrastructure and compliance needs.
That’s where Cohere is well-positioned — with a business-focused approach that emphasizes privacy, performance, and control to meet the needs of modern enterprises.
The Power of the Network: How We Got In
Our investment in Cohere didn’t happen overnight. It was the result of curiosity, persistence, and key relationships through our network.
We diligently tracked the company from an early stage as part of our broader AI investment thesis. Cohere’s stealthy nature and sharp focus on enterprise use cases focus stood out in a landscape dominated by consumer-facing hype. Through alumni network relationships, we refined our thesis about the scale of the enterprise GenAI opportunity.
In early 2023, we met with the Cohere team at an AI conference in San Francisco. During those conversations, we highlighted AV’s leading value as a network-driven VC — including access to our 850,000 member community base from schools like Stanford, Harvard, MIT, and Princeton.
Even then, as GenAI momentum was just beginning to build, investor interest in enterprise-focused players like Cohere was intense. Their raise was significantly oversubscribed. But thanks to our differentiated network and value-add approach, we ultimately secured allocation in the company’s competitive Series C round — led by Inovia Capital with participation from NVIDIA and Salesforce.
Why We Invested in Cohere
Cohere checks every box we look for in a breakout tech opportunity — technical strength, operational leadership, commercial traction, and disciplined execution.
1. Legendary team
We were impressed by the team members, who included:
- CEO Aidan Gomez, co-author of the seminal transformer paper that underpins today’s LLMs.
- COO Martin Kon, former CFO of YouTube and a senior BCG partner.
- Chief Scientist Phil Blunsom, former Lead of NLP at DeepMind and a Professor of CS at Oxford.
2. Capital efficiency
Cohere’s domain-specific AI models are designed for enterprise use — not trained on the full internet. This allows for dramatically lower compute costs and more efficient use of capital than OpenAI or Anthropic.
3. Technical & strategic validation
Cohere’s models consistently rank among the top-performers across the industry. Strategic partners include Salesforce, NVIDIA, Oracle, AMD, and Cisco — validating real-world utility and demand.
4. Leading investors & advisors
Cohere was backed by leading AI-focused firms like Index Ventures, Radical Ventures, NVIDIA, Salesforce Ventures and Prosperity7 (Saudi Aramco-backed fund). Supporters include AI luminaries such as a Nobel Prize-winner, the former Chief Scientist at Google Cloud, a ML/Robotics pioneer, and the Chief Scientist of Google DeepMind and Google Research.
Risks & Uncertainties
No VC investment is without risk. Here are key challenges we considered — and how we gained conviction.
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First-time founders at the helm
Cohere is led by AI researchers who, despite their impressive research pedigree and product vision, had not previously built a company to this scale. To strengthen operational leadership, the team brought on seasoned executives like former YouTube CFO Martin Kon. The presence of a strong investor syndicate also gave us confidence that Cohere would have access to experienced mentorship and strategic guidance. - Home
Hyper-competitive market landscape
The generative AI space is crowded, with dominant players like OpenAI and Anthropic. But Cohere’s enterprise-first, privacy-centric, and cloud-agnostic approach stood apart — resonating with CIOs who need secure, flexible solutions for multi-cloud environments. - Home
Early enterprise adoption
In 2023, LLM adoption was booming among consumers, but enterprise adoption was still ramping up. We believed in Cohere’s thesis of going after private deployments. Early, deep integration with partners like McKinsey, Oracle, and Salesforce gave us strong signals of broader industry adoption ahead.
Post-Investment Validation
Since our 2023 entry — when Cohere was just beginning to generate revenue — the company has delivered strong growth and strategic milestones.
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Revenue growth & ARR milestone
Cohere has more than doubled its revenue in the past four months, crossing the $100 million annualized revenue (ARR) mark by May 2025. - Home
Enterprise success
A striking 85% of revenue now comes from private deployments, primarily serving finance, healthcare, and government sectors. - Home
Series D & valuation boost
In mid 2024, Cohere raised a $500 million Series D at a $5.5 billion valuation, with participation from Alumni Ventures. - Home
Expanding global partnerships
Cohere continues to deepen its ecosystem with SAP, Oracle, AWS, Google Cloud, NVIDIA, and others — extending global reach and platform integration. - Home
Positioned for agentic AI
Cohere is strategically positioned for the rise of agentic AI. These LLMs can execute autonomous tasks across workflows, supported by secure, scalable, and cloud flexible infrastructure.
Conclusion: Building With the Visionaries Redefining Enterprise AI
AI is no longer a niche experiment — it’s becoming core infrastructure for the global economy. At Alumni Ventures, we believe the next decade will be defined by companies that deliver trusted, adaptable AI solutions to real business challenges.
Cohere is a clear example of that vision in action. Led by some of the brightest minds in AI, the company has taken a deliberately different path: focused on privacy, performance, and practical enterprise deployment — not hype. Its trajectory speaks for itself: rapid ARR growth, strong commercial adoption, and a growing moat of infrastructure, model performance, and strategic partnerships.
As investors, we look for teams building foundational technologies that will shape how industries operate — and we’re proud to support Cohere as one of those rare, category-defining companies.
Explore more stories like this in our AI Masterclass series — and see how Alumni Ventures identifies and supports the transformational startups shaping tomorrow’s economy.
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References:
Tech in Asia – “Cohere has more than doubled its revenue…”
https://www.techinasia.com/news/nvidia-backed-ai-firm-cohere-doubles-revenue-to-100m
Yahoo Finance – “Crossing the $100 million annualized revenue (ARR) mark…”
https://tech.yahoo.com/business/articles/ai-firm-cohere-doubles-annualized-203247455.html
BetaKit – “Raised a $500 million Series D at a $5.5 billion valuation…”
https://betakit.com/cohere-series-d-tops-out-at-500-million-raised-at-5-5-billion-valuation
Medium (Zachary Cefaratti) – “Cohere is strategically positioned for the rise of agentic AI.”
https://medium.com/@zcefaratti87/cohere-ai-well-positioned-for-the-coming-wave-of-enterprise-ai-application-and-agentic-ai-8cc52ab02ac8
LinkedIn – “One of the fastest growing enterprise software companies ever.”
https://www.linkedin.com/feed/update/urn:li:activity:7328888818609061888/
Reuters – “The result: 80%* gross margins without raising billions — a rare feat in foundational AI.”
https://www.reuters.com/business/ai-firm-cohere-doubles-annualized-revenue-100-million-enterprise-focus-2025-05-15/
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