Mistral AI, an AI startup headquartered in Paris, secures staggering $640 million in funding

Mistral AI has finally revealed the details of its long-awaited Series B funding round, with General Catalyst leading the charge. The company has been able to secure a whopping €600 million (equivalent to roughly $640 million in today’s exchange rate) in a combination of equity and debt.

This brings the startup’s valuation to a staggering $6 billion, cementing its place as one of the most valuable players in the ever-growing artificial intelligence market. As TechCrunch had previously reported, this funding round has been highly rumored for quite some time.

For those unfamiliar with the company, Mistral AI is a relatively new player in the AI space. Just a year ago, it had managed to raise an impressive $112 million in seed funding to establish itself as a major rival to giants like OpenAI and Anthropic.

The brains behind Mistral AI are co-founders who hail from renowned tech companies like Google’s DeepMind and Meta. With their team, they have been working on innovative and foundational models that aim to compete with the best performing models on the market, such as GPT-4o, Claude 3, and Llama 3.

Mistral AI has also made its mark by releasing pre-trained and fine-tuned models under an open-source license. These models, like Mistral 7B, Mistral 8x7B, and Mistral 8x22B, have been made available with the Apache 2.0 license, which imposes no restrictions on their use or reproduction beyond basic attribution.

However, the company’s most advanced models, such as Mistral Large, have been designed as proprietary models to be repackaged as API-first products. One of their recent releases, Codestral, is a generative AI model specifically for code. Due to its inputs, it comes with a restrictive license that prohibits its use for commercial activities.

Corporate customers can take advantage of Mistral Large through a paid API that follows a usage-based pricing model. Additionally, the company has also launched a chat assistant called Le Chat, which is currently available for free use. Furthermore, Mistral AI has distribution partnerships with major cloud providers, including Microsoft Azure, with the tech giant also being a minor shareholder in the company.

In a statement following the announcement, Mistral AI’s co-founder and CEO Arthur Mensch expressed his excitement and gratitude for the continued support from new and existing investors. He also emphasized the company’s drive to push the boundaries of AI and make state-of-the-art technology accessible to all.

“I am delighted to see new and existing investors renew their confidence in our business and provide new support for its expansion,” said Mensch. “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. It guarantees the company’s continued independence, which remains fully under the founders’ control.”

Amongst the investors, General Catalyst takes the lead in the Series B round. This venture capital firm was already an existing investor in the startup. According to the Financial Times, Mistral AI managed to raise €468 million in equity and €132 million in debt (equivalent to roughly $500 million and $140 million respectively).

Joining General Catalyst in this funding round are other big names in the industry, including Lightspeed Venture Partners, Andreessen Horowitz, Nvidia, Samsung Venture Investment Corporation, Salesforce Venture, and a long list of other investors.

Buckle up for this extensive list of investors, here we go. 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 are also part of Mistral AI’s impressive list of backers.

After releasing impressive foundational models over the past 18 months, Mistral AI will now focus on attracting corporate customers in hopes of turning their engineering work into revenue. Only time will tell if they will be successful in this endeavor.