Canadian AI company Cohere has reportedly started closing a Series E round that could reach $5 billion at a $20.5 billion valuation, with the Government of Canada committing up to $1.14 billion.

Cohere has officially announced the initial close of a Series E funding round targeting up to CAD $7 billion (roughly USD $5 billion) at a valuation of CAD $35.7 billion (roughly USD $20.5 billion). It marks the largest private financing round in Canadian tech history.

If accurate, the round is larger than what was reported in September, where Cohere was in advanced talks to raise $2 billion to $3 billion at a $20 billion valuation, a report Cohere declined to comment on. In September 2025 it was valued at $7 billion.

The government stake is the notable part. Cohere sells its models to governments, and this week it publicly raised security concerns about Alibaba’s Qwen model after a test. As TechCrunch noted, a company selling to governments could benefit if officials grow wary of free Chinese alternatives. The reports do not say what Canada receives in return for its commitment.

Important updates regarding the round:

• Lead Investor: Led by companies under Germany’s Schwarz Group
• Government & Strategic Backers: Includes a major commitment from the Government of Canada (alongside returning and new investors like Nvidia, Bell Ventures, Bullhound Capital, Inovia Capital, and Prosperity7 Ventures). Check out Light Reading for more on the sovereign AI and corporate participants.
• Use of Capital: Funds will support scaling R&D, enterprise sovereign AI solutions for regulated industries, expanding North American and European footprints, and building out Canadian computing infrastructure by 2030.
• Growth Metrics: Cohere reported 165% year-over-year Annual Recurring Revenue (ARR) growth ending Q3 2026, scaling its customer base 20-fold to around 300 enterprise and public-sector clients.