Toronto-based artificial intelligence (AI)-focused venture capital (VC) firm Radical Ventures has launched a new $800-million USD growth fund.
As first reported by The Financial Times and Bloomberg and confirmed by BetaKit, Radical has secured nearly $800 million in commitments for the fund, which will focus exclusively on growth-stage AI startups.
A person familiar with the matter told BetaKit that Radical has already closed the majority of the fund, which is set to bring the VC firm’s total assets under management to $1.8 billion.
The new fund is set to bring Radical’s total AUM to $1.8 billion.
For Radical, which has focused largely on early-stage AI startups to date, the new fund marks its first targeting later-stage AI businesses, and will enable the firm to write larger cheques into bigger companies, including both existing portfolio firms and new ones.
This growth fund represents Radical’s fifth fund, following a small initial seed fund, its $325-million first institutional fund, its $100-million Opportunity Fund for follow-on investments, and the $550-million fund Radical raised last year for early-stage AI startups.
“We are pleased to announce Radical’s venture growth fund,” Radical partner Aaron Brindle told BetaKit. “This new fund complements our early-stage funds and enables us to partner with existing portfolio companies and new founders as they transform industries and build global businesses. We are fueling the next chapter of growth for scaling AI companies.”
Brindle declined to provide further comment or disclose additional details with BetaKit regarding Radical’s latest fundraising efforts, limited partners, or the new growth fund’s focus.
Radical’s existing limited partners include TD, the Public Sector Pension Investment Board, Wittington Investments, AI leaders like Geoffrey Hinton and Fei-Fei Li, and the Canada Pension Plan Investment Board (CPP Investments). According to The Financial Times, the family office of former Google CEO Eric Schmidt also backed Radical’s $550-million fund.
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In its recently published fiscal Q1 report, the Canada Pension Plan Investment Board (CPP Investments) disclosed that it has committed $75 million towards Radical’s new growth fund. This brings CPP Investments’ total commitment to Radical to $204 million “across various fundraising cycles” since its initial investment in 2019, according to the results.
Founded in 2017, Radical invests primarily in companies that leverage AI, backing Canadian startups as well as businesses based abroad. The firm is led by co-founder and managing partner Jordan Jacobs, the co-founder of AI research hub Vector Institute and AI startup Layer 6, which was acquired by TD in 2018. In recent years, Radical has expanded its leadership team and established offices in San Francisco and London.
To date, Radical has amassed a portfolio that includes many of Canada’s buzziest and best-capitalized AI startups, from Toronto-based large language model developer and OpenAI competitor Cohere to autonomous driving company Waabi, AI chip startup Untether AI, and quantum computing firm Xanadu.
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According to The Financial Times, Radical’s new fund is the largest of its kind for AI.
As the broader tech market has cooled amid the macroeconomic downturn, and many other startups and fund managers have struggled to raise capital, AI has remained hot. But since the AI investment frenzy began following OpenAI’s release of ChatGPT in late 2022, some investors have become more weary of AI and how much many companies are spending on it.
Radical is not the only Canadian firm that has seen an opportunity to back growth-stage AI startups: earlier this year, a pair of former pension fund leaders struck out on their own and launched Intrepid Growth Partners, seeking $500 million for a similarly focused fund.
Intrepid is led by ex-CPP Investments CEO Mark Machin and Mark Shulgan, who worked with Machin at CPP Investments and previously co-founded and led OMERS Growth Equity.
Feature image courtesy Radical Ventures.
