Cohere and Aleph Alpha sign merger as $20B fundraise nears

Cohere made a string of announcements on Wednesday at the ALL IN AI conference in Montreal, signing a definitive merger agreement with Germany's Aleph Alpha and unveiling a strategic partnership with OpenText Open Text Corporation ↘ 0.46% — all while confirming strong investor interest in a Series E round reported to value the combined company at around $20 billion.

Merger and Fundraising Take Shape

Cohere and Aleph Alpha formalized the merger first disclosed in April, with the combined business set to operate under the Cohere name from dual headquarters in Toronto and Berlin. Aleph Alpha co-chief Ilhan Scheer will become Cohere's chief operating officer. Lidl-owner Schwarz Group is investing €500 million in the new entity, though the companies did not disclose updated financial terms and said the transaction remains subject to regulatory approvals.reuters

The merger runs alongside a Series E fundraise that The Globe and Mail first reported on September 11, citing four sources who said Cohere was in advanced talks to raise between $2 billion and $3 billion at a valuation of about $20 billion. Two sources told the paper the deal could close as early as this week. The financing reportedly includes participation from the Canadian and German governments alongside existing backers, though non-government funding is expected to make up the majority.benzinga+2

Cohere told PYMNTS it does not comment on speculation but confirmed "strong inbound interest" from investors in the Series E process. If completed at the reported valuation, the round would represent the largest capital raise by a private Canadian startup and nearly triple the company's $7 billion valuation from a $100 million second close in September 2025.seekingalpha+2

OpenText Deal Targets Regulated Markets

Separately, Cohere announced a partnership with OpenText to integrate Cohere's North platform and AI models with OpenText's Aviator AI agents. The combined solution, expected to reach clients in early 2027, is designed for governments and regulated industries that require control over data location and deployment.markets.ft+2

"Data is not the supporting act; it is what gives agentic AI the context it needs to perform," said OpenText CEO Ayman Antoun. Cohere CEO Aidan Gomez said the partnership gives organizations "a secure path to move agentic AI from pilot to production".investing+1

An Enterprise AI Bet at Scale

The announcements collectively illustrate Cohere's strategy of pursuing enterprise and sovereign AI customers rather than competing in the consumer chatbot market. With the Aleph Alpha combination, Cohere gains a deeper foothold in European government contracts, while the OpenText relationship adds distribution across more than 120,000 enterprise clients. Neither partnership disclosed contract values or revenue commitments, however, leaving the $20 billion valuation marker — against roughly $240 million in 2025 annual recurring revenue — as a figure investors will need to validate on trust until Cohere provides audited financials.ctol+1