The deal includes more than €325 million in equity from investors led by Andreessen Horowitz, and the company is in talks to invest €200 million. According to people familiar with the matter, Nvidia and Salesforce agreed to contribute an additional 120 million euros in convertible debt.
As part of the deal, the startup's three co-founders agreed to each sell more than 1 million euros of equity, according to documents documenting the terms of the deal. According to the investment letter, three other Mistral insiders will sell shares, including Cedric O, the former French minister who serves as the company's chief adviser, and they plan to sell nearly 1 million euros in shares.
For a company less than a year old, the $2 billion valuation highlights the tech community’s boundless optimism about the future prospects and profits of artificial intelligence companies. Mistral develops open source software that powers chatbots and other generative artificial intelligence tools, an area that requires significant computing resources. The company says it is cheaper and more efficient than its U.S. peers.
Mistral has become one of Europe's most prominent artificial intelligence startups, owned by Alphabet Inc. Founded by former scientists from its DeepMind and Meta platforms (META.US) who have studied large language models similar to those provided by OpenAI. In June this year, Mistral raised US$113 million in its first round of financing, which is a huge amount of money for a European technology startup.
General Catalyst, Lightspeed Venture Partners, Bpifrance and several other companies also participated in the round, documents show.