The São Paulo firm's fundraising success—anchored by three major development institutions—suggests that cautious optimism is creeping back into a region that watched billions evaporate when the tech frenzy ended.
For anyone tracking Latin America's startup scene, the past three years have felt like a prolonged hangover. The intoxicating 2021-2022 fundraising binge gave way to brutal corrections, shuttered companies, and venture firms struggling to convince investors the region still mattered.
Now, tentatively, money is moving again.
São Paulo-based Canary—a firm that's been writing early checks across Latin America since 2017—has locked down anchor commitments from three heavyweight development finance institutions for its fourth fund. The International Finance Corporation, Japan International Cooperation Agency, and IDB Lab have all backed the vehicle, which is targeting $150 million. As of last June, SEC filings showed Canary IV had already pulled in $87.6 million from 45 investors, a figure that's almost certainly climbed since those disclosures.
The development banks' involvement signals something beyond just capital. These institutions don't move quickly, and they don't bet on managers without track records. Their presence suggests that Canary—co-founded by managing partner Marcos de Toledo Leite alongside Florian Hagenbuch and former Peixe Urbano founder Julio Vasconcellos—has built the kind of performance history that survives due diligence.
When the Institutions Show Up
IFC committed $15 million in September, a move a senior executive there publicly framed as part of broader efforts to shore up Brazil's venture infrastructure. JICA matched that figure with its own $15 million pledge, formalized at a January 6 ceremony in Tokyo—the kind of diplomatic photo-op that underscores how venture capital has become intertwined with international development priorities.
IDB Lab, which had already backed Canary's third fund after approving the relationship in December 2023, has joined Fund IV as well. The institution hasn't disclosed how much it committed this time around.
What's notable here is that these development players aren't writing checks on concessional terms or carving out special impact mandates. They're co-investing alongside private limited partners in a fund pursuing the same thesis Canary has maintained since inception: cut the first checks into pre-seed and seed-stage companies anywhere in Latin America, then reserve capital for follow-ons when those bets start working.
It's a straightforward strategy. The hard part is making it work consistently enough that institutions keep coming back.
Scaling Without Losing the Plot
Canary's fundraising trajectory tells its own story about the region's evolution. The firm started with a $45 million debut fund. Fund II closed at $75 million in December 2019. Fund III hit $100 million when it was announced in November 2021—right as the market was peaking, which was either excellent timing or a reminder that even smart managers can't predict macro swings.
Now they're aiming for $150 million, a 50% jump from the prior vehicle.
Through the first two funds, Canary invested in more than 100 companies. The portfolio includes names like Buser, the bus-booking platform that's taken on Brazil's intercity travel incumbents; Sallve, a beauty brand that built a following before raising serious venture money; crypto asset manager Hashdex; and Clara, the spend management startup.
The firm claims—and this is the kind of metric that either impresses allocators or makes them squint suspiciously—that companies in its portfolio have a three-times higher chance of reaching Series B compared to the broader market. Without seeing the underlying data or methodology, it's hard to verify. But clearly, someone found it convincing.
Recent deal activity shows Canary hasn't slowed down while fundraising. The firm led a $12 million Series A for Axenya last August alongside Indicator Capital. In October, it led a R$10 million pre-seed round for Bull. It's also participated in rounds for Revena, Telepatia AI, and Lastro—a spread of bets that suggests the firm is staying active even as it closes out the new fund.
The Numbers Look Less Grim, At Least
Fundraising for a Latin America-focused venture fund right now requires confronting some uncomfortable realities. Regional startup funding hit approximately $4.1 billion in 2025, according to Crunchbase—up 14.3% from the prior year, which sounds encouraging until you remember that 2021-2022 saw multiples of that figure flowing into the ecosystem.
But here's a data point that probably helped Canary's pitch: LAVCA reported that $10.1 billion was raised across 94 Latin America-dedicated funds in 2024, the second-highest year on record. Perhaps more tellingly, experienced managers raising Fund IV or later captured 72% of investor capital that year.
Translation: LPs are backing managers they know. First-time funds are getting crushed. If you've been around long enough to have a third or fourth fund, and your portfolio hasn't imploded, you're in a very different conversation than someone launching a new firm.
Kaszek Ventures, another major Brazilian player, closed a $540 million Fund VI in 2024—proof that large capital commitments to the region haven't disappeared entirely, they've just gotten pickier about where they land.
What Happens Next
Canary hasn't announced a final close, and the SEC filing trail goes cold after last June. The addition of three development institutions as cornerstone investors strongly suggests the firm is advancing toward—or perhaps has already reached—its $150 million target, but exact timelines remain opaque.
The firm's LinkedIn profile lists the team size at somewhere between 11 and 50 employees, which is the kind of vague range that social media platforms force you into but suggests meaningful infrastructure. That matters when you're trying to deploy $150 million across a continent without missing the next breakout company or losing track of your existing bets.
Canary's thesis remains sector-agnostic and regionally broad. They'll look anywhere in Latin America, not just Brazil, for what they describe as "scalable, tech-enabled business models." The operator-led approach—Leite and his co-founders came from building companies, not analyzing them from analyst desks—remains central to how the firm positions itself.
Whether that translates into returns that justify a fourth fund, then a fifth, will depend on factors both within and far beyond the firm's control. Exit markets remain challenging. Currency volatility hasn't gone anywhere. The regional IPO window that everyone keeps talking about remains stubbornly theoretical.
But for now, at least, the development banks are betting that experienced managers in Latin America deserve another shot. Canary is one of the firms they've picked to take it.
