tech
February 13, 2026
Enterprise AI startup Cohere tops revenue target as momentum builds to IPO: Investor memo
Cohere's competitors OpenAI and Anthropic are also weighing potential IPOs and competition for enterprise customers is heating up.
TL;DR
- Cohere surpassed its $200 million annual recurring revenue target, reaching approximately $240 million last year.
- The company experienced over 50% quarter-over-quarter growth throughout 2025.
- Cohere's "capital-efficient model" allows it to avoid hefty infrastructure costs by enabling customers to run models through managed cloud services or their own hardware.
- Gross margins averaged around 70% in 2025, with a year-over-year expansion of 25 basis points.
- Cohere plans to expand in Europe and develop its AI agent platform, North, in 2026.
- The company's valuation has grown to approximately $7 billion.
- Cohere's competitors, OpenAI and Anthropic, are also considering initial public offerings.
- OpenAI reported over 1 million business users, and Anthropic serves more than 300,000 businesses.
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