France's Mistral has raised €3 billion at a valuation of around €21 billion ($24 billion), in what the three-year-old AI company said on Tuesday was the biggest equity funding round by a privately owned European technology firm.
Mistral said that the round was jointly led by existing investor PSG Equity, along with South Korea's Samsung Electronics and the EU-backed Scaleup Europe Fund, which both invested in it for the first time.
The fundraising makes Mistral Europe's second-highest-valued private tech group and the fastest-growing company in Europe, its chief financial officer Johan Bergqvist told Reuters.
He said that the funds will be used to power Mistral's models and invest in so-called frontier research, as the company seeks to compete with larger rivals.
Mistral is seen as Europe's best chance of developing a leading AI company, even though it is dwarfed by U.S. rivals including Anthropic, whose valuation is nearly 40 times bigger at $965 billion, and OpenAI, valued at $852 billion.
Both are planning public listings this year.
Bergqvist said that any IPO for Mistral was "always of course an optionality for us going forward" but that timing was "still up in the air", adding: "We don't have any ongoing discussions around that at the moment".
TECH SOVEREIGNTY PUSH AND EXPANSION BEYOND EUROPE
Technological independence has become an urgent issue for Europe, highlighted in June by a U.S. decision to limit foreign access to two advanced models developed by Anthropic.
"The fact that the EU or Europe have to have their own kind of AI provider in the game is important," Bergqvist said.
"We have seen in the past that there is politics involved in the access of these solutions, and it's important that you make sure that you maintain access and do not compromise your kind of supply chain," he said, without referring to Anthropic directly.
Mistral, which develops "open" models which allow its more than 125 customers to download and customise models on their own servers, is on track for $1 billion of annual recurring revenue by the end of the year, Bergqvist said.
Its client base is becoming more geographically diverse, he said, with growth particularly in Asia and North America.
Microsoft, which agreed to spend billions of dollars on Mistral's computing infrastructure in Europe as part of a deal announced in July, did not participate in the funding round, Bergqvist said.
($1 = €0.8603)
