Mistral, a generative AI startup aiming to be Europe’s OpenAI, seeks $300 million in new funding

Mistral AI, a Paris, France generative AI startup co-founded by former researchers from Meta Platforms and Alphabet, is reportedly seeking to raise an additional $300 million. The news comes as the AI race heats up, and emerging generative AI startups seek funding to challenge industry giants like OpenAI, Microsoft, and Google.

In June, Mistral first made a big splash after it secured a massive $113 million in seed funding, valuing the company at $260 million. The funding round, led by Lightspeed Venture Partners, saw participation from Redpoint, Index Ventures, Xavier Niel, JCDecaux Holding, and other prominent venture capital firms across Italy, Germany, Belgium, and the UK. However, the company finds itself needing more capital beyond the initial $100 million to fuel growth and its expansion plans.

Today, The Information reported that Mistral is now aiming to raise an additional $300 million from investors, merely four months after the initial seed round led by Lightspeed Venture Partners, citing sources familiar with the ongoing talks. The goal is to position the Paris-based startup, which often called itself the “OpenAI of Europe,” at a valuation exceeding $1 billion before this subsequent investment round.

It’s currently unclear which venture capital firms Mistral has spoken to about the potential investments. However, Andreessen Horowitz, a significant player in the generative AI investment landscape, is reportedly in search of investment opportunities in open-source large language model (LLM) developers, The Information reported, citing another person familiar with the matter.

Founded in 2023 by Arthur Mensch (CEO), Guillaume Lample, and Timothee Lacroix, Mistral specializes in developing large language models and various AI technologies. The company’s name, derived from a northern winter wind, reflects its aspirations to become a significant player in the AI domain.

Mensch, Mistral’s CEO and a former DeepMind research scientist said the company’s mission is to “construct the next generation of AI systems capable of solving real-world problems.” He added that the new funding will be used to expand the team, accelerate research and development efforts, and establish new offices across Europe and the United States.

The fact that Mistral is seeking such a large amount of funding is indicative of the growing investor appetite for AI startups. In recent years, AI startups have raised billions of dollars in funding, and many of these companies are developing cutting-edge AI technologies that have the potential to revolutionize many industries.

As Mistral moves forward, it remains to be seen whether the company can accomplish its goal of establishing itself as a major player in the AI landscape. Nevertheless, the company’s formidable team and ambitious objectives position it as one of the most intriguing AI startups to watch in the years to come.