Mistral AI, an artificial intelligence startup building large language models to power conversational AI tools, has raised €450 million ($487 million) in a recent funding round. The funding values the company at $2 billion just months after its founding.
The round was led by top-tier Silicon Valley venture capital firm Andreessen Horowitz, which invested €200 million. Several other high-profile technology companies also participated, including Nvidia and Salesforce, contributing €120 million in convertible debt between them.
The deal includes more than €325 million in equity from investors led by Andreessen Horowitz, which is in talks to invest €200 million in funding. Nvidia and Salesforce have agreed to contribute another €120 million in convertible debt, they added. Some details are still in flux and may change, according to the sources.
Documents detailing the transaction terms show Mistral’s three co-founders agreed to sell more than €1 million apiece in equity as part of the deal. Three other Mistral insiders also plan to sell shares, including Cedric O, the company’s chief adviser and former French minister, who intends to sell nearly €1 million worth of equity, the documents revealed.
The $2 billion valuation for a company less than a year old reflects the tech industry’s optimism about the future promise and profitability of artificial intelligence companies like Mistral, according to experts. Mistral makes open-source software that powers chatbots and other generative AI tools, a field that requires considerable computing power. The startup describes itself as less expensive and more efficient than U.S. peers.
Founded by former scientists from Alphabet’s DeepMind and Meta Platforms who worked on large language models similar to those from Sam Altman’s OpenAI, Mistral has emerged as one of Europe’s most prominent AI startups. It raised $113 million in an initial funding round in June, an enormous sum for a European tech startup.
General Catalyst, Lightspeed Venture Partners, Bpifrance and several others also participated in the latest funding round, the transaction documents showed.