Paris-based Mistral AI, a start-up working on open source large-scale language models that are the building blocks for generative AI services, has tripled its December valuation to 60% to compete more aggressively with the likes of OpenAI. The company is raising funds at a valuation of $1 billion. TechCrunch learned from multiple sources. We understand from sources close to us that DST, General Catalyst and Lightspeed Venture Partners are all considering participating in this round.
DST — a leading investor led by Yuri Milner and a prominent backer of tech industry giants such as Facebook, Twitter, Snapchat, Spotify, WhatsApp, Alibaba and ByteDance — is a new name that has not previously been reported. It is. GC and LSVP are both previous backers, and their names were also reported by WSJ today. People familiar with the matter told TechCrunch that the round is expected to be worth less than $600 million.
We can also confirm that Softbank, one of the companies mentioned multiple times, is not participating in the deal at this time.
“SoftBank is not in the picture,” a source close to SoftBank told TechCrunch. This is also consistent with what our sources have been telling us since March when this round first began, but it appears not everyone is on the same page. Since then, multiple reports have linked SoftBank to investing in Mistral.
Sources say Mistral's round is based on a lot of inbound interest and has been in the works since March or earlier, just months after Mistral closed a $415 million round at a $2 billion valuation. It is said that this was in progress.
Since then, this funding has been the subject of much speculation (see here, here, and here), but investors, round sizes, and valuations have all changed, with targets constantly shifting. There is. Some investors looked away and walked away, probably because of the price.
“We love the company and we love Arthur,” one prominent investor told me this week about CEO and co-founder Arthur Mensch. “We love how fast they move, but they're not talking.”
Mistral focuses on taking an open source approach to its work, unlike other LLM builders such as OpenAI and Anthropic. This is one of the youngest of his LLM players on the market, and is also notable as a major effort to expand from Europe (sometimes referred to as “European Champion”). Since releasing his first LLM in September 2023, he has released two more.
The important thing about Mistral AI raising at a $6 billion valuation (post-money, people confirmed) is that this valuation has risen from its $5 billion target in a matter of weeks. Mistral hasn't disclosed how many users it has or what its revenue is (it does offer a variety of prices for accessing its API, and pricing plans include tokens and tokens for the three models released so far). , which includes some customizations built by Mistral).
All this said, it is currently unclear how closely investors' interests are tied to the current business funnel and hopeful predictions for the future.
This shows that the market for startups and AI in general is extremely hot, despite the exit challenges facing private technology companies that have scaled up.
Softbank side step
It's true that SoftBank is very keen to participate in more AI deals, even if it doesn't invest in Mistral (not right now anyway). The company is ramping up its AI activities on the back of Vision Fund's strong performance earlier this year. That includes putting in hundreds of millions of dollars to lead a $1 billion funding round for Wayve earlier this week.
And sources close to Graphcore have confirmed to TechCrunch that SoftBank is indeed considering the possibility of acquiring the troubled British AI chip designer, corroborating other reports from the past few months. .
Graphcore's backstory is more one of an AI cloud than a silver lining, emblematic of some of the problems some late-stage startups are currently facing. The chip design company discovered the opportunity for more efficient AI chips early on, picked up some interesting IP, and has investors such as Sequoia, Microsoft, and Dell Technologies, as well as Greg Brockman and Ilya Sutskever. raised hundreds of millions of dollars from individuals over the years. OpenAI etc.
However, this market is completely dominated by the major player, Nvidia, in terms of revenue and mindshare. Graphcore's last fundraising valuation, now more than three years ago, valued it at $2.8 billion, is inching toward the end of its runway. As a result, there is a lot of speculation that it will sell for significantly less than that amount, somewhere between $500 million and $600 million. However, we understand that the startup has been generating higher-than-expected revenues over the past few months, which has given it an extended runway and perhaps more options.
According to information from our sources, SoftBank may have also talked to Graphcore about investing, and that may be one of the outcomes. One investor described rumors that SoftBank was close to some form of agreement as “stretching.”
But SoftBank has a special attachment to chips. The company still owns a huge chunk of Arm and has set aside $100 billion just for AI chips. It's not just software. The company is actually considering partnering with UK-based AI chip design company Graphcore.
Mistral declined to comment on the matter. DST and General Catalyst did not respond to requests for comment. Lightspeed declined to comment on the speculation. We will update as we learn more.