The company is already in Dizraptor’s portfolio since Sep 27. New offerings are possible in the future
Cohere empowers developers with ready-made language models and customization via APIs.
What Is Cohere?
Cohere is an AI company that focuses on large language models (LLMs) for business. Their software helps machines read, interpret, and generate text, making it easier for computers to interact with humans through language. The company offers an API platform that allows developers to use pre-made and build their own custom models based on Cohere's existing work.
The company develops Natural Language Processing (NLP) models tailored for enterprises. This allows them to integrate NLP capabilities into their applications without having to build their own models, saving time and resources.
Cohere's software, trained on big data, is capable of analyzing text and creating new content. For example, to form product descriptions, review documents, and communicate with clients in chatbot format. More specialized models are also available – e.g. for search on a particular site.
The system can be deployed on the basis of any cloud infrastructure via API: a client's existing cloud environment or a virtual private cloud. For companies with individual requirements, Cohere offers fine-tuning of its models, including training on provided data sets.
With Cohere's AI model ecosystem, any company can build NLP-powered solutions that deliver content flow. CEO, Aiden Gomez: “We know the market will need an independent platform, not tied to any of the hyperscalers, to enable enterprises to adopt this technology in a way that is extremely data-private and secure.”
Some of the use cases:
Content moderation for toxic comments on online platforms
Identify unique clusters from posts made on the subreddits
Extract the main point of a transcribed conversation
Generate multiple alternative titles with a better marketing copy
Summarize the main point of a paragraph into a single sentence
Next article recommendations based on reading history
Generate an outline for a blog post given topic and audience
According to Cohere’s President and COO, Martin Kon, the company has reported a “65% month-on-month growth in API calls over the past year,” accompanied by a surge in developer interest.
While OpenAI requires users to bring data to their models exclusively on Azure, Cohere has a different philosophy. The company “wants to bring our models to your data, in whatever environment you feel comfortable in,” says Kon.
In June 2023 Cohere announced a strategic partnership with Oracle. This collaboration leverages Oracle Cloud Infrastructure (OCI) to train, build, and deploy Cohere's Large Language Models. A collaboration with McKinsey was announced in July 2023, under which McKinsey will offer Cohere's generative AI solutions to its clients.
Key Opportunities for Cohere
Streamlined human-computer interaction. Cohere seeks to make interactions between humans and computers seamless.
Unlocking unstructured data. Cohere aims to help organizations harness the potential of unstructured data (like text and images), which makes up a significant portion of data but is challenging to analyze. The company uses Natural Language Processing to extract meaning and structure from this data, making it more valuable.
Venturing into computer vision. Cohere is exploring the integration of visual elements into language models.
The demand for AI-powered solutions is increasing across all industries due to the rapid development of deep learning and NLP technologies. A survey by Expert.ai in late 2022 found that 77% of companies using NLP solutions were planning to increase investment going forward.
The AI market is showing explosive growth. Reports from research companies are staggering in numbers.
MarketsandMarkets – the global AI market size is expected to grow at a CAGR of 36.8% from 2023 to 2030 to reach $1,345B by 2030.
Grand View Research – CAGR of 37.3% from 2023 to 2030.
Allied Market Research – CAGR of 38% from 2021 to 2030 to reach $1,582B by 2030.
According to Zion Market Research, the global market for AI is projected to increase from $60B in 2021 to $422B by 2028 with a CAGR of 39.4% during the period. The conversational systems market is expected to triple in size by 2028.
Investors and Financials
Cohere's Annual Recurring Revenue (ARR) is projected to be $45M by the end of 2023. The company has raised a total of $440M in funding.
Google, Oracle, NVIDIA, Salesforce, Inovia Capital, Index Ventures, Tiger Global are among Cohere’s investors. Notable figures in the AI industry, such as Geoffrey Hinton, often referred to as the “Godfather of AI,” along with esteemed experts like Stanford computer scientist Fei-Fei Li, Berkeley's Pieter Abbeel, and the University of Toronto's Raquel Urtasun, have also chosen to invest in Cohere.
In its latest funding round in June 2023, the company reached a valuation of $2.1B, or $95.82 per share. Just a month later, consulting firm SAP made an undisclosed investment in Cohere as part of a broader commitment to generative AI startups.
In August 2023, Tiger Global divested a 2.1% stake it held in Cohere for $63M, signifying that Cohere's valuation had surged to $3B.
Aiden Gomez (CEO): in 2017, Gomez, a former Google intern, worked with a team of researchers on a paper called “Attention Is All You Need.” They introduced a new neural network technique called the transformer, aiming to understand connections within lengthy data strings. The transformer had a far-reaching impact on Google's product portfolio. Aiden is one of the pioneers of Large Language Models.
Martin Kon, COO: former YouTube CFO and BCG Senior Partner.
Jaron Waldman, CPO: serial entrepreneur, worked in Rakuten and Apple.
Aaron Pugh, VP Sales: former Global Head of Sales for reCAPTCHA Enterprise & Web Risk.
Rajan Sheth, VP Marketing: scaled Heroku to Salesforce exit and Box to IPO.
Competition. The market for AI solutions is highly competitive and has a number of players, including OpenAI (ChatGPT), Anthropic, Adept AI, Inflection, Hugging Face. This could impact Cohere's market position and profitability.
Market overvaluation. Due to current hype, there is a risk that the company's valuation has currently outgrown its pace of product development.