Radical Ventures secures over US$1B at first close for late-stage AI fund

Why it matters

Radical Ventures is giving Jacobs the capital to follow AI founders into larger private rounds while keeping more of the potential upside tied to Canadian institutions.

Jordan Jacobs has taken Radical Ventures into late-stage investing with the first close of the Radical Breakouts Fund, securing over US$1 billion in commitments from named Canadian institutions alongside other global investors.

Radical Ventures says the fund is Canada's largest-ever venture capital vehicle. The disclosed figure covers a first close rather than a completed fundraise, and the exact amount above US$1 billion was not specified. Radical Ventures also called the vehicle "multi-billion-dollar" without stating its final target. The announcement does not say whether that description refers to a final target or the broader strategy.

The distinction matters because the Breakouts Fund represents a new stage in the strategy Jacobs and Tomi Poutanen have pursued since founding Radical Ventures. The pair previously co-founded Layer 6 AI, sold it to TD Bank Group in 2018 and moved into AI leadership roles at the bank. They also helped establish Toronto's Vector Institute, giving Radical Ventures unusually direct ties to Canada's academic, corporate and founder networks.

Canada's pensions move further into AI

The Breakouts Fund's named backers are PSP Investments, CPP Investments, HOOPP, TD Bank Group, BMO Financial Group, CI Global Asset Management and OPTrust. Radical Ventures did not identify a lead investor or break out the institutions' individual commitments.

PSP Investments described itself as an anchor investor in Radical Ventures since the investment manager's first institutional fund. CPP Investments said its relationship with Radical Ventures began in 2019 and described the Breakouts Fund as an opportunity to extend that partnership into later-stage companies as they scale.

The pension capital also changes who participates in the upside if Radical Ventures' portfolio companies become enduring public businesses. Jacobs' argument is that Canadian research and founders have produced globally competitive AI companies, while the capital funding their later years has largely come from the United States. That arrangement can leave Canadian institutions with limited exposure to businesses developed from Canadian talent and research.

"For decades that meant our best companies looked to the United States to fund their most important years, and much of the value they created went with them," Jacobs said in the announcement.

Radical Ventures is asking Canadian retirement systems and banks to underwrite a different outcome. The Breakouts Fund can invest globally, so the mandate is broader than keeping Canadian companies Canadian. Its domestic pitch rests on giving Radical Ventures enough capital to keep supporting Canadian winners while competing for allocations in large international AI rounds.

Jacobs follows founders beyond the early rounds

Radical Ventures built its reputation around earlier-stage AI investments and incubations, including Cohere, Waabi and World Labs. The Breakouts Fund adds the capacity to invest through growth and pre-IPO rounds, reducing the pressure to hand later financings entirely to larger U.S. managers.

That strategy follows the financing requirements of Radical Ventures' existing portfolio. Jacobs named Cohere, Waabi, World Labs, Xanadu, Etched, Crusoe, Prime Intellect, Decart, Latent Labs, Muon Space and Aspect Biosystems among the businesses Radical Ventures has backed.

The portfolio also includes Discovery Loop, the automated-research venture founded by Jeff Dean (@JeffDean) and three other former Google researchers. RuntimeWire reported in August that Radical Ventures and Khosla Ventures co-led Discovery Loop's initial financing. Radical Ventures has since listed Dean as the venture's chief executive, as RuntimeWire reported later that month.

Discovery Loop illustrates the access Jacobs is selling to limited partners: prominent technical founders choosing Radical Ventures near formation, followed by the possibility of much larger investments if their businesses scale. A dedicated late-stage pool lets Radical Ventures preserve those relationships without reserving an impractical share of an early-stage fund for follow-on checks.

Large late-stage AI rounds increasingly fund compute, chips, data centers, robotics fleets and research teams long before investors receive liquidity. Radical Ventures' announcement assumes that leading AI companies will remain private through repeated financings and may approach public markets at valuations of $100 billion or more. That creates room for private investors to capture additional appreciation while requiring them to commit more capital for longer periods at already elevated prices.

A billion-dollar pool in a thinner Canadian market

The fund's scale stands out against recent Canadian venture activity. KPMG's Q1 2026 Venture Pulse report put Canadian venture investment at about US$1 billion in the first quarter, down from US$3.9 billion in the final quarter of 2025. AI and deep technology still drew much of the available capital, led by Waabi's $750 million Series C.

Fund commitments and quarterly startup investment measure different things: the Breakouts Fund will deploy money over years, while KPMG counted capital invested into companies during a three-month period. The comparison still shows how large Radical Ventures' first close is relative to the market around it.

A BDC report on Canada's venture market found that foreign investors supplied 80% to 90% of the capital in Canadian financings of US$50 million or more. Radical Ventures wants to occupy the gap between the country's research strength and its limited domestic supply of growth-stage venture money.

Jacobs has spent the years since Layer 6's sale building the relationships needed to make that case. His bet with the Breakouts Fund is that Canadian institutions will seek late-stage AI exposure through a manager already connected to founders who might otherwise take most of that financing, and potentially much of the resulting value, south of the border.