Japan’s Global Brain establishing fund to invest in blockchain tech, jointly with...

Japan’s Global Brain establishing fund to invest in blockchain tech, jointly with Omise

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L to R: Sayoko Kaji (Venture Partner, Global Brain), Ayako Miyaguchi (Advisor, OmiseGo / ex-Managing Director Japan, Kraken), Yasuhiko Yurimoto (CEO, Global Brain), Jun Hasegawa (Founder / CEO, Omise / OmiseGo), Thomas Greco (Special Advisor, OmiseGo / ex-Advisor, Ethereum Foundation), Hisashi Sano (Venture Partner, Global Brain)
Image credit: Masaru Ikeda

See the original story in Japanese.

This article is part of the coverage of Global Brain Alliance Forum 2017 held in Tokyo

Tokyo-based VC firm Global Brain held its annual conference called Global Brain Alliance Forum (GBAF) 2017 earlier this month. At a press conference at GBAF, the firm announced that it would establish a fund focusing on blockchain tech in partnership with Omise, the Bangkok-based fintech startup providing the OmiseGo cryptocurrency. The amount of investments is estimated to be several tens of billions of yen (several hundred millions of dollars).

This September, Global Brain had established a new subsidiary called GB Blockchain Labs (GBBL) with the aim of fostering the blockchain ecosystem along with Jun Hasegawa (Founder / CEO, OmiseGo) and Thomas Greco (Special Advisor to OmiseGo / ex-advisor to Ethereum Foundation). Omise had raised $25 million by ICO (Initial Coin Offering) this July, exceeding the $20 million total invested from VCs.

Hidetaka Aoki (Global Brain; left) and Kan Notoya (Venture Co-creation Dept. of Mitsui Fudosan; right) speaks about PoC (proof of concept) for drone platform developed by Israeli startup SiteAware at Nihombashi, Tokyo
Image credit: Masaru Ikeda

At the press conference, Yasuhiko Yurimoto (CEO, Global Brain) commented on the current status of its funds under operation. He explained that KDDI Open Innovation Fund, jointly operated by KDDI, has been strengthening investment into Korean startups while 31 VENTURES Global Venture Fund, jointly operated by Mitsui Fudosan, had invested into Israel-based SiteAware (previously nown as Dronomy), developing drone software for the construction industry. Regarding GB-VI Fund formed last year, he said it had secured 20 billion yen (about $177 million US) in total from 12 limited partners (LPs) and closed funding this June.

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Among their past portfolio companies, 11 firms including Loco Partners (acquired by KDDI), Kabuku (acquired by Futaba), Fluenty (acquired by Samsung) and August (purchased by Assa Abloy) succeeded in exiting during 2017. The cumulative exit success rate of Global Brain since its foundation reached 42% including IPO (initial public offering) and M&A (merger and acquisition).

Global Brain’s fund update 2017
Image credit: Masaru Ikeda

During a presentation in the same day given by Hasegawa who is also involved in managing GBBL, he emphasized that Ethereum-related business is in the earliest stage and overwhelmingly lacks information plus engineers to construct the ecosystem. To make up for this, Omise will focus on incubation in this field and revealed it will develop co-working space business for blockchain technology jointly with Global Brain. The first co-working space will be established next spring in Shibuya, Tokyo.

Hasegawa said:

We want to make it the place where top global experts can meet up. […]

Of course, we welcome support from major enterprises, but we really want them to use blockchain for business positively themselves. We intend to bring Japan-born projects to the world, such as Berlin or Poland as well as to Bangkok.

Hasegawa’s presentation implied that the purpose of the co-working space is not only co-working but also a context of open innovation which intends to promote blockchain usein large companies.

Hasegawa emphasizes the firm is aiming to make OmiseGo’s performance to be at 1 million transactions per sec.
Image credit: Masaru Ikeda

The story about how Hasegawa became motivated to incorporate Ethereum into business is detailed in his recent blog post. As a side note, we will have him at The Bridge’s conference The Coin, to be held in Tokyo next January, as a keynote speaker.

Global Brain’s blockchain-related portfolio companies include Bluzelle, Coins.ph, Digix and Korea-based Dunamu dealing with mobile stock trading services.

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Details of blockchain-focused co-working space business
Image credit: Masaru Ikeda

Looking at the global trend of blockchain tech-focused VCs, NextBlock Global, the Toronto-based VC investing in blockchain technology, founded by Alex Tapscott (who is the son of prominent futurologist Don Tapscott and is co-author of ‘Blockchain Revolution’ as well), plans an IPO on Toronto Stock Exchange within this year. New York-based ConsenSys, the startup studio that focuses on Ethereum, announced earlier this month that it had established a $50 million fund. Mark Cuban, the investor also known as a millionaire, revealed he has invested into 1confirmation, the $20 million-scale cryptocurrency tech-focused fund established by Nick Tomaino who formerly served Coinbase as Business Development Manager. Furthermore, San Francisco-based Pantera Capital set up a $100 million-scale ICO fund this June.

Within Japan, B Dash Ventures recently launched an ICO-focused fund called B Cryptos jointly with Quoine, the blockchain startup which had raised about $15 million by ICO. Further announcement of fund formation related to cryptocurrency, ICO or blockchain from VCs in and out of Japan can be expected.

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Translated by Taijiro Takeda
Edited by “Tex” Pomeroy