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A year after making a significant entry into the generative AI field with a record-breaking $113 million seed round, Mistral AI is raising even more funds—almost six times that amount.
Today, the Paris-based startup announced it has secured $640 million in Series B funding, combining both debt and equity, bringing its valuation close to $6 billion. This round was led by General Catalyst and included contributions from several new and existing investors, such as Lightspeed, Andreessen Horowitz, Bpifrance, and the investment divisions of IBM, Samsung, Salesforce, Cisco, and Nvidia. This marks a staggering 23-fold increase in Mistral’s valuation from $240 million in June 2023.
Arthur Mensch, co-founder and CEO of Mistral, expressed his gratitude for the renewed confidence from investors and the new support for expanding the business. He highlighted that this new funding round allows the company to push the boundaries of AI and make advanced technology accessible to everyone, while maintaining the company’s independence.
The company plans to utilize the funds to build more computing capacity and expand its team across various departments. This will help them scale their commercialization efforts globally and better compete with other AI players like OpenAI and Anthropic. Notably, OpenAI recently partnered with Apple to become the first third-party large language model (LLM) provider to be included in the new iOS 18.
Mistral’s journey as a leader in open AI
Since its inception last year, Mistral has stood out by focusing on open-source models and providing torrent links for downloading and testing them. The company introduced Mistral 7B and Mixtral 8x7B “mixture of experts” models, followed by Mixtral 8x22B and Codestral, a 22 billion parameter, open-weight generative AI model specializing in coding tasks.
Mistral also released Mistral Large, a proprietary model that nearly matches GPT-4 and outperforms Claude 2, Gemini Pro, and GPT 3.5 with native proficiency in five languages and a context window of 32K tokens. This model is primarily accessible through the company’s API and Microsoft Azure and can be tested via their recently launched chat app.
Overall, Mistral claims to have seen over 27 million downloads from public repositories, with their open models being used for a variety of complex applications, especially in finance, technology, and the public sector.
Their successful open models have propelled Mistral’s commercialization efforts, leading to partnerships with major tech companies like Microsoft, Snowflake, Databricks, Capgemini, IBM, and Perplexity, many of which have also invested in the company.
This approach has significantly broadened the startup’s reach and established it as a trusted player in the AI field dominated by OpenAI, Anthropic, and Google. With the latest funding round, which includes $500 million in equity and $140 million in debt, Mistral aims to speed up these efforts and adopt new distribution channels to spread the use of its models globally, including in the United States.
According to Bloomberg Intelligence, the generative AI market, valued at $40 billion in 2022, is expected to skyrocket to $1.3 trillion over the next decade, growing at a 42% compound annual growth rate (CAGR).
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