Aidan Gomez, CEO of Cohere, has indicated that the AI startup continues to demonstrate strong momentum with enterprise clients, even as competitors like Google, Anthropic, and OpenAI vie for market share.

According to an investor memorandum from February, Cohere achieved approximately $240 million in annual recurring revenue last year, surpassing its $200 million target. The memo also noted that the company's quarter-over-quarter growth rate exceeded 50% throughout 2025.

"Our core philosophy has gained clear recognition in the market," the company stated in the memo. "As regulated institutions worldwide select Cohere as their trusted partner for securely deploying AI at scale, our sales pipeline continues to expand."

Founded in Toronto in 2019, Cohere specializes in developing AI models and software tools for businesses. Backed by investors including Nvidia and Salesforce Ventures, the company has reached a valuation of around $7 billion.

Prior to the release of the investor memo, CEO Aidan Gomez said in October that the startup aims to go public "as soon as possible." He expressed confidence that investors would welcome a "pure-play AI investment opportunity."

However, people familiar with the matter revealed that Cohere's rivals, OpenAI and Anthropic, are also preparing for potential initial public offerings (IPOs), with both companies openly expressing ambitions to capture the enterprise market.

In November, OpenAI reported that over one million businesses worldwide are using its technology, while Anthropic stated in September that it serves more than 300,000 enterprise customers. These substantial customer bases present significant challenges for other startups trying to keep pace.

Cohere has told investors that its "capital-efficient model" sets it apart in the competitive landscape.

The company generates most of its revenue from software and noted that it avoids high infrastructure costs because customers can run its models directly via managed cloud services or on their own hardware. This approach allows Cohere to invest "more aggressively" in customer acquisition and research and development, according to the investor memo.

The memo also indicated that Cohere's average gross margin in 2025 was around 70%, reflecting a 25-basis-point improvement year-over-year.

"By scaling compute resources based on customer demand, we avoid the speculative overheating seen across the broader AI market, laying the foundation for more sustainable growth at Cohere," the company wrote.

Cohere plans to continue its expansion into European markets in 2026 and further develop its AI agent platform, North. The company expects to maintain "high growth rates" in the coming year.