Canadian institutions back AI’s expensive growth years

Canadian investors dominate the country’s smallest venture rounds. U.S. investors become much more common as the cheques get bigger.

This week, some of the country’s largest pension funds and banks backed a new fund that could help write more of those bigger cheques on the home front.

Radical Ventures announced the first close of its Breakouts Fund at the Canada Investment Summit in Toronto. It calls the Breakouts Fund the largest venture capital fund in Canadian history and describes it as a multi-billion-dollar fund.

So far, Canadian institutions and other global investors have committed more than $1 billion USD. The named backers include PSP Investments, CPP Investments, HOOPP, TD, BMO, CI Global Asset Management, and OPTrust.

The global investors were not named, and the commitments announced at the first close will be invested over time.

The Breakouts Fund targets late-stage AI companies, whose financing rounds can run into the hundreds of millions. It can invest anywhere, Canada included, and Radical hasn’t said how much it expects to invest here.

CVCA data show how quickly the investor mix changes as rounds grow. Canadian-only syndicates accounted for 70.4% of the money invested in rounds below $5 million in 2024, while mixed Canadian-U.S. syndicates accounted for 67.5% of the money in rounds above $50 million. 

U.S. participation eased in 2025, but American investors still took part in roughly two-thirds of Canadian financings above $50 million.

“Canada has never had a shortage of world-class AI companies,” says Jordan Jacobs, co-founder and managing partner of Radical Ventures. “What we have lacked is capital at the scale required to keep them here as they grow.”

Radical hasn’t said how much of the fund could go to Canadian companies. Whether it helps keep them here will depend on how much of that capital reaches them.

Final shots

• More late-stage capital could give Canadian AI vendors the staff and runway to support larger deployments.
• Radical hasn’t said how much of the fund could go to Canadian companies, so its portfolio will show whether local vendors get the money to compete.
• Canadian pension plans gain exposure to global AI returns even when the companies receiving the money are based elsewhere.