Brazil's VC Canary raises $100 million new fund for Latin America

In all, Canary expects to invest in about 50 companies with this new fund, whose work began in the second half of 2021

10.Nov.2021 14:53 BRT
UPDATED 16:40 BRT

Founded five years ago and operated and invested by entrepreneurs, Canary has already invested in more than 100 companies in Latin America;
Together, Canary and Atlantico already have more than R$3 billion under management.

Brazilian venture capital firm Canary announces on Wednesday that it has raised a new $100 million fund – the VC’s third investment fund – dedicated to making its first investment in companies in Latin America.

“When we created Canary in 2017, we had the conviction that the Latin American innovation and technology market was going to mature, with many opportunities for great businesses and, above all, brilliant people willing to undertake. We positioned ourselves from the beginning as the first institutional investors of new companies and we were very happy to see that our belief was correct. Since then, the startup ecosystem in the region has evolved a lot”, says Marcos Toledo, co-founder and managing partner of Canary, in a press release.

Founded five years ago and operated and invested by entrepreneurs, Canary has already made checks on more than 100 companies in Latin America – using its first two funds, raising $45 million and $75 million respectively in 2017 and 2019.

In total, Canary’s investee companies have completed 69 subsequent rounds, raising $2.3 billion in new investment and generating more than 5,400 direct jobs across the region. Canary’s portfolio includes 10 companies with market valuations over $100 million and some over $500 million.

Canary has already invested in Buser, Sallve, Hashdex, Facily, and Trybe. According to the company, the new fund is focused on early-stage and local partnerships with large global VC firms, as it already does with names like a16z, Dragoneer, SoftBank, Ribbit, and QED.

“Latin America has seen an explosion in startup activity in recent years, especially with fintechs tackling problems for a giant and often, underserved population. We believe we are just at the beginning and that there are great opportunities for the region,” says Angela Strange, general partner at Andreessen Horowitz. “Canary has been a trusted and well-connected partner in the region as we continue to support great entrepreneurs.”

“When we started modeling what Canary would look like in 2017, the thesis was that there was a macro movement of very talented people leaving more traditional careers and starting new companies or joining new teams. This has indeed been happening, but at a much faster rate than we imagined. Latin America still has huge challenges to tackle and today entrepreneurs have access to intellectual and financial capital like never before,” says Toledo.

“More than just investing in the most ambitious teams, we have created a powerful network, capable of bringing knowledge, connections, and technical aids to our onslaughts, encouraging and opening paths for entrepreneurship in Latin America.”

Canary has a team of 20 people. The same group of investor-entrepreneurs that is behind Canary has created the Atlantico fund, focused on investments in more mature companies, which already have a fit with the market and are about to scale.

In 2020, Atlantico, led by partner Julio Vasconcellos and with decision-making and operations completely independent from Canary, raised approximately US$80 million with investors and has already made 13 investments.

“We identified that there is, in the Latin American market, a great need for investments and support for companies that have product-market fit and are on the verge of scale. At Atlantico, we have assisted the investees with our expertise and with studies and data about the region. The partners are very experienced and have already founded successful companies in Brazil and the United States”, says Vasconcellos.

Together, Canary and Atlantico already have more than R$ 3 billion under management. “From the beginning, we had the vision that Latin America as a whole had great potential for new businesses, but we decided to focus initially on Brazil to prove our hypothesis,” says Canary’s managing partner.

“Over time, we intensified our operations on the continent and today we are proud to invest in companies operating in countries such as Mexico, Argentina, and Colombia.”

In all, Canary is expected to invest in around 50 companies with this new fund, work on which began in the second half of 2021. “We believe that excellent founders will always find a way to build the best businesses. Around here, we specialize in finding the best people, with ambition that matches ours, and helping them along the way,” says Izabel Gallera, partner at Canary.

It is no coincidence that Canary has already invested in people even before its business existed or was defined, as in the case of Trybe. “We always seek to do business with people we admire. We chose Canary as our investor precisely because of the people who are part of the firm,” says Matheus Goyas, co-founder and CEO of the startup.