Cohere, an AI startup that makes foundation models and rivals ChatGPT maker OpenAI, has its work cut out for it as it continues to struggle with revenue, despite being highly successful in fundraising and reaching notable valuation.

According to a recent report from The Information citing sources familiar with the matter, Cohere only made about $13 million in annual revenue by the end of 2023. This means the startup only managed to make $1 million per month during that time, as per a person who was able to view the company’s fundraising pitch to potential investors.

Despite its tepid revenue figures, Cohere seems to have no issues attracting investors, as it is reportedly in advanced talks to raise $500 million at a valuation of about $5 billion, as per a report from Reuters.

Fortunately for Cohere, it also managed to raise its annualized revenue from $13 million in December to $22 million this month. This development came soon after the startup released its latest AI model Command-R, said Reuter’s sources who chose to remain anonymous.

Founded by ex-Google researchers, the startup has showcased its expansion capabilities to investors through the development of AI models tailored for enterprises. With an existing collaboration with Oracle, Cohere is also aiming to extend the availability of its models to additional leading cloud services.

In June of the previous year, Cohere reached a valuation of $2.2 billion after securing $270 million in funding from investors like Inovia Capital, Nvidia, and Oracle. The valuation Cohere is pursuing currently had not been disclosed before.

In January, Reuters disclosed that Cohere was seeking to secure between $500 million and $1 billion in funding. The report also mentioned that current investors are expected to participate in this new round of financing.

Should this fundraising effort prove successful, it would underscore the continued interest from investors in backing AI startups with significant valuations, even those with modest revenue figures, anticipating the widespread future use of AI technologies.

Companies specializing in foundational models have been actively seeking capital investments to support the costly process of developing AI models. These models necessitate substantial computing resources and the expertise of leading professionals in the industry.