A record-setter with heavyweight backing
Radical Ventures rolled out the Radical Breakouts Fund with more than $1 billion secured at first close, which the firm says makes it the largest-ever venture fund in Canada. A sizable chunk of the capital comes from the country's biggest financial institutions.
Among Canada's biggest pension sponsors participating are PSP Investments, the Canada Pension Plan Investment Board, and HOOPP, the plan serving Ontario's healthcare workers. Other contributors include Toronto-Dominion Bank, Bank of Montreal, and CI Global Asset Management.
The launch took place alongside the Canada Investment Summit in Toronto - an inaugural gathering organized and led by Prime Minister Mark Carney to spotlight the country for leading asset allocators. Carney highlighted the fund at a Tuesday press conference, saying it will "help Canadian AI companies scale up and stay Canadian, and serve Canadians."
Why go big on late-stage AI now
Radical already runs earlier-stage vehicles, but Co-Founder and Managing Partner Jordan Jacobs said this new fund is about trying to build "trillion-dollar companies," acknowledging that startups are staying private longer and getting far more valuable before they list. He said founders inside and outside Radical's portfolio pushed for this kind of growth capital, and the first closing was pulled together in under six weeks. Jacobs added he wants the fund to ultimately become a multibillion-dollar investment vehicle.
The AI bench: Cohere, Waabi, Xanadu, and more
Founded in 2017, Radical Ventures focuses on artificial intelligence. Its portfolio includes early backing of Cohere Inc., frequently labeled Canada's leading AI company, as well as Waabi Innovation Inc. in autonomous trucking, Xanadu Quantum Technologies Ltd. in quantum computing, and Discovery Loop, a recursive research project spearheaded by veteran former Google scientists.
The firm said the new fund is meant to chip away at a longstanding issue in Canada: high-potential startups heading to the US to find deeper-pocketed investors. Asked where the fund could deploy capital, Jacobs said, "These are a bunch of companies in many cases that we've been investors in since the beginning and continue to invest in. So we know them really well. But there'll be others too outside the portfolio, over time." He added that a number of Canadian firms "would fit the bill."
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Cohere's momentum as buyers seek options
Cohere stands among the limited set of large language model vendors located outside the US and China, and is enjoying an "unbelievable tailwind," according to Jacobs. He linked that to US restrictions earlier this year on access to Anthropic PBC's latest models, which pushed businesses and governments to look for alternatives.
"It made the point very succinctly to the rest of the world that you not depend on a model which might get shut off by a foreign government at any moment," he said, adding, "we could have spent unlimited money on marketing and it wouldn't have done what that did."
What it means for your money
More late-stage fuel changes the trajectory for Canadian AI standouts. Jacobs is pitching the fund as a way to keep winners at home, while Carney frames it as a mechanism to "help Canadian AI companies scale up and stay Canadian, and serve Canadians." Translation for you: more homegrown AI contenders may hit real scale without decamping for US capital, and a good chunk of the pipeline could be companies Radical has backed since the early days.
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