From left, Ivan Zhang, Nick Frosst and Aidan Gomez are the co-founders of Cohere.Fred Lum/the Globe and Mail
Cohere Inc., a Toronto artificial-intelligence startup looking to make it easier for humans to talk to machines, has raised US$125-million from Tiger Global Management LLC, the latest in a string of large-scale investments in Canada by the prolific New York financier.
The funding comes just five months after Cohere announced a US$40-million venture-capital financing led by Index Ventures. Other investors in the latest deal include early backer Radical Ventures, Index and Section 32. News of the financing was first published Tuesday by Fortune.
Cohere, co-founded in 2019 by protégés of AI luminaries Geoffrey Hinton (an investor in the startup) and Jeff Dean, has also recruited a big name as its vice-president of engineering and machine learning: Bill MacCartney, former director of proactive intelligence at Apple Inc., who will open the company’s new Silicon Valley office.
Tiger is one of a handful of giant global investors that have piled into fast-growing Canadian tech companies in the past year. Another, Japanese investment giant SoftBank Group’s Vision Fund 2, has announced three investments in Canada in the past week alone.
Tiger is renowned for doing extensive advance research on startups it wants to back, then leaping at the opportunity to invest, typically reaching out even before they seek financing. Tiger offers “founder-friendly” terms to those it believes can become market leaders, including big dollars at rich valuations, fast-closing times, and no request for board seats or other conditions usually demanded by venture capitalists.
Canada had a record year in 2021 for venture-capital fundraising by domestic startups. That pace has continued into the new year despite a sharp drop in valuations for publicly traded technology companies, which some observers have speculated could spread to private markets.
Cohere is one of a string of Toronto AI startups founded by University of Toronto alumni and professors to raise sizable financings in the past year. Others include Raquel Urtasun’s self-driving technology startup Waabi Innovation Inc., Deep Genomics, led by Brendan Frey, and semiconductor developer Untether AI Corp., co-founded by Martin Snelgrove.
Cohere says its natural language processing (NLP) software provides a richer understanding of human language, including semantics, sentiments and tone. As such, it improves on existing software that powers machine-human interactions such as online conversations between consumers and customer service chatbots. The idea is to provide the same quality of NLP models to a wide array of customers that only a handful of internet giants currently use.
Cohere builds on a pioneering 2017 paper co-written by its chief executive officer Aidan Gomez (a one-time intern in Mr. Hinton’s Toronto lab), when he worked for Google. The paper invented a concept known as “transformers,” which improved the efficacy of NLP technology that use AI algorithms to generate language. Mr. Gomez and Cohere co-founder Nick Frosst, another ex-Google researcher who previously worked with Mr. Hinton, wanted to translate gains in NLP from the research sphere to practical applications and set out on their own to do that. The third co-founder is fellow AI researcher Ivan Zhang.
“Cohere has enabled access to one of the world’s most important technology breakthroughs of the last decade – AI transformers,” Radical managing partner Jordan Jacobs said in an e-mailed statement. “Now every developer and company has easy, cheap access to the kind of language technology that previously only the Googles and Microsofts of the world could afford and access.”
Tiger partner John Curtius said in a statement: “Understanding human language is the next frontier for artificial intelligence.” He added Cohere “has effectively packaged together an easy-to-use” set of software development tools that allow any developer to build on Cohere’s language models. “In the same way language pervades each and every aspect of our lives, the application for NLP will follow suit in the digital world.”
In recent months, Cohere has announced general access to its software developer tools, entered into a partnership with Google Cloud to use its supercomputing infrastructure and doubled its employee count to about 70. The company said usership of its platform has also increased by 800 per cent since last summer as companies test and adopt its technology.
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Sean Silcoff