Mistral AI Raises $640mm Series B

Mistral AI has closed its much-rumored Series B funding round, raising €600 million (around $640 million at today’s exchange rate) in a mix of equity and debt. General Catalyst led the round. As TechCrunch previously reported, the startup is now valued at $6 billion following this funding round.

As a reminder, Mistral AI is a relatively new entrant in the artificial intelligence space. The company raised a massive $112 million seed round around a year ago to set up a European rival to OpenAI, Anthropic and other AI giants.

Co-founded by alumni from Meta and Google’s DeepMind, the company is working on foundational models with the aim to rival the best performing models today, such as OpenAI’s GPT-4o, Anthropic’s Claude 3 and Meta’s Llama 3.

Mistral AI has also released pre-trained and fine-tuned models under an open-source license with open weights. For instance, Mistral 7B, Mistral 8x7B and Mistral 8x22B were released under the Apache 2.0 license, an open source license that has no restrictions on use or reproduction beyond attribution.

Mistral AI’s most advanced models, such as Mistral Large, are proprietary models designed to be repackaged as API-first products. Codestral, the company’s first generative AI model for code, has a restrictive license, as its outputs can’t be used for commercial activities.

Companies can use Mistral Large through an API that they’ll have to pay for according to how much they use it. The company also offers a chat assistant called Le Chat that is currently free to use. The company also has distribution partnerships with cloud providers, such as Microsoft Azure — Microsoft is also a minor shareholder in Mistral AI.

“I am delighted to see new and existing investors renew their confidence in our business and provide new support for its expansion. This new round puts us in a unique position to push the frontier of AI and bring state-of-the-art technology to everyone’s hands,” Mistral AI co-founder and CEO, Arthur Mensch, said in a statement. “It guarantees the company’s continued independence, which remains fully under the founders’ control.”

General Catalyst, which led the Series B round, was an existing investor in the startup. According to the Financial Times, Mistral AI raised €468 million in equity and €132 million in debt (around $500 million and $140 million respectively). The long, long list of investors includes Lightspeed Venture Partners, Andreessen Horowitz, Nvidia, Samsung Venture Investment Corporation, and Salesforce Ventures.

Other investors include Belfius, Bertelsmann Investment, BNP Paribas, Bpifrance (through its Digital Venture fund), Cisco, Eurazeo, Headline, Hanwha Asset Management’s venture fund, IBM, Korelya Capital, Latitude, Millennium New Horizons, Sanabil Investments, ServiceNow and SV Angel.

Mistral AI’s work over the past 18 months has been impressive when it comes to releasing foundational models. Now, let’s see if it can attract corporate customers to turn this engineering work into revenue.