Germany's Schwarz Group leads Cohere's Series E, targeting up to C$7 billion for sovereign AI
The Toronto-based AI company, which recently combined with Heidelberg's Aleph Alpha, named the owner of Lidl and Kaufland as lead investor. Canada has committed up to C$1.6 billion in staged equity.
Cohere announced on Thursday 29 October the initial close of a Series E funding round targeting up to CAD 7 billion, which would value the company at CAD 35.7 billion. The companies of Schwarz Group, the German retail and technology group behind Lidl, Kaufland and the STACKIT cloud, are the lead investor.
The Government of Canada committed to an equity investment of up to CAD 1.6 billion, made in stages. Cohere did not disclose how much has been raised at the initial close.
The deal
According to Cohere's release, commitments to date come from Schwarz Group as lead, new investors Bell Ventures, Bullhound Capital and the Government of Canada, and returning investors Inovia Capital, NVIDIA and Prosperity7 Ventures. Cohere described the round as the largest private financing ever undertaken by a Canadian technology company.
Handelsblatt converted the target to roughly €4.7 billion and Canada's commitment to about €1.03 billion. The Globe and Mail also reported the C$35.7 billion valuation. Because the round is still open, the final amount may differ from the target.
Cohere said the money will go into its model and product roadmap, fully verticalised AI products for regulated industries and long-term compute infrastructure to train frontier enterprise models. CFO Francois Chadwick said the company will keep scaling across North America, EMEA and APAC.
The European angle: Schwarz Group and Aleph Alpha
This is a Canadian company, but the lead money is German. Schwarz Digits, the IT and digital division of Schwarz Group, has, according to the release, recently committed billions to new data centre capacity in Germany.
Christian Müller, CEO of Schwarz Digits, said in the release that the investment follows the "strategic business combination of Cohere and Aleph Alpha", the Heidelberg AI company. He said the partnership brings together Canadian AI leadership and trusted European infrastructure, and that the goal is to anchor these frontier capabilities in Schwarz's sovereign STACKIT cloud.
Germany's Federal Minister for Digital Transformation, Karsten Wildberger, was also quoted in the release. He congratulated Cohere and pointed to the shared vision of Cohere and Aleph Alpha for trusted, secure and independent AI capabilities.
Growth figures Cohere disclosed
Cohere said it ended the third quarter of 2026 with 165% year-on-year growth in annual recurring revenue, driven by its agentic platform North. It said its customer base grew 20 times over the past year to 300 customers. Named customers include Bell Canada, Fujitsu, RBC, RWS, PwC, TD Bank and TKMS.
The company also listed 2026 transactions involving Aleph Alpha, Reliant AI and AISLE, and offices in cities including London, Berlin and Paris. Cohere said it remains headquartered in Toronto.
What Canada gets
The Prime Minister's office said Cohere has committed to create at least 1,000 new Canadian technical jobs by 2030, to invest at least C$1.7 billion in additional computing infrastructure in Canada by 2030, and to keep its Canadian incorporation and headquarters. Ottawa said the money will be paid in stages, with regular reporting against these commitments.
Why it matters for European founders and investors
Sovereign AI is turning into an investable category with very large cheques. A German corporate leading a multi-billion round in a foreign model developer shows that strategic buyers of AI, not only venture funds, are willing to set the price for model companies that promise control over data and deployment.
For European AI startups, the deal points to two paths. One is partnering with large industrial or retail groups that own cloud infrastructure and want models they can run under their own rules. The other is consolidation: Aleph Alpha chose to combine with a bigger non-European player rather than stay alone, and its technology now sits inside a group that is raising at this scale.
The same day, Paris-based Mistral released the weights of Mistral Large 4, also pitched as sovereign AI. European founders building applications on top of these models now have more choice between open-weight and enterprise-hosted options. For background on Mistral's model launch earlier this month, see our Large 4 preview coverage.
For investors, sovereign AI rounds increasingly mix private and public money. Canada's staged equity, tied to jobs and compute commitments, is a model European governments may study as they consider how to keep AI companies and their infrastructure at home.
What to watch next
Cohere has not said when the round will close or how much of the CAD 7 billion target is committed. Watch for the final close, for how much new compute lands in Germany through STACKIT, and for how Aleph Alpha's team and products are integrated. Business publication Quartz and other outlets also covered the announcement.
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