Cohere achieved about $240M in annual recurring revenue in 2025, surpassing its target of $200M, CNBC reported, citing a February investor memo.
The Canadian AI startup — which builds large language models, or LLMs, and customizes them for businesses — saw quarter-over-quarter growth of more than 50% throughout 2025, the report added.
Cohere did not immediately respond to a request for comment from Seeking Alpha.
“Our thesis is clearly resonating in the market,” said the memo. “Our sales pipeline continues to grow as global organizations across regulated sectors choose Cohere as their trusted partner for secure AI adoption at scale.”
In August 2025, Cohere raised $500M through a funding round that included existing investors Advanced Micro Devices’ (AMD) AMD Ventures, Nvidia (NVDA), and Salesforce’s (CRM) VC arm. The round valued Cohere at $6.8B. A month before this, in July, the company had also raised $500M in a funding round led by Canadian pension investment manager PSP Investments and a syndicate of additional investors, including backers at Cisco Systems (CSCO), Japan’s Fujitsu (FJTSF) (FJTSY), AMD Ventures, and Canada’s export credit agency EDC.
Cohere informed investors that its “capital-efficient model” sets it apart from its competitors in the industry.
The company mainly generates revenue from software, and it noted that it can avoid high infrastructure costs because customers can run its models via managed cloud services or on their own hardware directly. This approach enables Cohere to invest “more aggressively” in customer acquisition and research and development, said the memo, according to the report.
Cohere’s gross margins averaged about 70% in 2025, expanding by 25 basis points year-over-year, the report noted.
“By scaling compute resources proportionally to customer demand, we remain insulated from the speculative excesses surrounding the broader AI market, positioning Cohere for more sustainable growth,” said the company in the memo.
This year, Cohere noted that it will continue to expand in Europe and build out its AI agent platform, North. The company told investors that it expects another year of “rapid growth.”
In October 2025, Cohere’s CEO Aidan Gomez said that the company hopes to make its public market debut “soon.” Gomez informed Bloomberg that he thinks investors would welcome a “pure play AI investment opportunity.”
However, AI heavyweights OpenAI (OPENAI) and Anthropic (ANTHRO) are also weighing potential IPOs. Both AI companies have their eyes on enterprise customers this year as they race to win more revenue, users, and market share.