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Japan’s hardware-focused incubator ABBALab launches $14 million startup fund

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See the original story in Japanese. Japan’s ABBALab, a startup incubator focusing on IoT (Internet of Things) or IoE (Internet of Everything) business, last week announced the establishment of ABBALab IoE 1st Investment Limited Liability Partnership as its new fund. The fund was formed with about 1.5 billion yen (about $14 million) in committed capital from investors including Mistletoe, Hon Hai venture capital fund 2020, Sojitz, Sakura Internet and angel investors. The redemption period of the fund is ten years. Its investment target is not only hardware but also general products or services in IoT / IoE field, while covering wide investment stages from the prototyping stage or a pre-seed round to a series A round phase. Also follow-on investment will be considered according to the situation. In ABBALab, CEO Osamu Ogasahara’s personal assets had been invested in IoT startups so far, with the investment targets being disclosed as well. No New Folk Studio (smart footwear) … See this article Exiii (personalized myoelectric hand) … See these articles Vinclu (smartphone accessory / hologram AI) … See these articles Symax (health condition analyzer inside toilet) … See these articles Fove (eye-tracking Virtual Reality headset) … See these articles Up Perfoma (footballer’s…

abbalab-osamu-ogasahara
ABBALab founder and CEO Osamu Ogasahara

See the original story in Japanese.

Japan’s ABBALab, a startup incubator focusing on IoT (Internet of Things) or IoE (Internet of Everything) business, last week announced the establishment of ABBALab IoE 1st Investment Limited Liability Partnership as its new fund.

The fund was formed with about 1.5 billion yen (about $14 million) in committed capital from investors including Mistletoe, Hon Hai venture capital fund 2020, Sojitz, Sakura Internet and angel investors. The redemption period of the fund is ten years.

Its investment target is not only hardware but also general products or services in IoT / IoE field, while covering wide investment stages from the prototyping stage or a pre-seed round to a series A round phase. Also follow-on investment will be considered according to the situation.

In ABBALab, CEO Osamu Ogasahara’s personal assets had been invested in IoT startups so far, with the investment targets being disclosed as well.

Necessity of forming funds

Upon fund establishment, I had an interview with CEO Ogasahara (all question in boldface asked by the writer, and answered by Ogasahara).

First of all, would you explain your activities so far? You had invested your personal assets in ABBALab.

During the past two years, I started ABBALab with Taizo (Son, CEO of Misletoe) as a profit-making corporation, and been involved with investment for prototyping or communication activities. Meanwhile, I have participated in starting up DMM.make AKIBA, IoT Platform of Sakura Internet or Japan Region of OpenFog. Those are all to set a ground from which new startups will be born.

The investment targets steadily increased. Was that within your expectation?

Actually, I could not have met any startups with impact other than my investment targets during the first year. While receiving a few requests for investment examination in one month, I might possibly not have been able to notice promising startups to invest in during prototyping phase with just my senses.

You had run an acceleration program once in ABBALab. Would you tell me the unsuccessful points of the program?

We formed a fellowship system to have businesspersons participate in the activities as mentors, but the cost effectiveness was bad because it was hard for them to work within the startups’ timeframe.

There was also a system to build teams anew by gathering failed startups. Could you provide actual examples?

There was no case where separated individual members had united into one. However, we found a case in which a team manufactured a concept model of a product in combination with a close team, of course with charges though.

How much do you evaluate that in score?

A 70. Although each startup is responsible for its own business, I think I myself could do more in terms of speed or number of matters as an accelerator.

Let’s move on to the topic about the new fund. The return on personal asset-sized investment may be a kind of community creation for example, which means just support. However, fund establishment will produce a financial business aspect. Could I ask you the reason why you formed the fund this time?

For example, it may be not so bad as a portfolio to continue investing a few million yen into 10 to 20 startups per year under the current style. However, even if only ABBALab was given excellent investment targets, there is no guarantee that a better environment would be formed in ten, twenty or fifty years later.

To deal with this, I noticed the need to change the system on the assumption of follow-on such as prototyping, seed and series A. Moreover, it is difficult to run ABBALab in such a style only with personal assets.

I see.

By only increasing the number of shareholders and raising money from them, I think our degree of freedom will be limited as a result, because we just have unlisted startups’ shares in the prototype phase (in most cases), for which valuation is difficult.

So you thought that simply forming fund is easier to understand than fundraising and investing as a corporation.

As for our result of investment activities, we had shown a not-too-bad performance for introduction to investors, where some of the invested startups had succeeded in fundraising during their next round, so that I came to consider raising money by forming a fund as ABBALab, not capital increase.

Is there any change with establishment of the fund?

What the good thing is, simply an increase of the amount and the possibility of follow-on, or possibility of collaboration or additional investment by LPs. By having more concerned people with the fund between us, we can contribute to the resource secure for startups through requests for assistance or mentoring that we have not been able to handle.

One point which will widely change is, when considering follow-on of tens of millions in scale, we have to share that with an advisory board in advance, because we invest the fund received from LPs, not personal assets.

What do LPs (limited partners) expect in addition to investment return?

Foxconn (managing Hon Hai venture capital fund 2020) had already invested in Fove, and Sojitz started supporting a deal with Symax. Also, Sakura Internet is working to adopt Tsumug’s products in home IoT business with Apaman Shop (Japanese rental housing broker).

Thank you for your time today.

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Translated by Taijiro Takeda
Edited by “Tex” Pomeroy

Japanese internet giant DMM launches spectacular hardware lab for startups in Akihabara

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See the original story in Japanese. Here is good news for entrepreneurs aiming to develop hardware. Japanese internet company DMM.com launched a hardware incubation space called DMM.make Akiba in Akihabara on Friday [1]. The facility will open on 11 November, and has started receiving membership applications. DMM.make Akiba offers members a facility valued at $4.5 million comprising 150 machines for hardware production, such as 3D printers, testing devices for acquiring public certification for electric appliances, and platforms for mass production. In addition to providing office and event space, members can use the address of the facility to register their company. Tokyo-based hardware startup Cerevo and hardware-focused startup incubator ABBALab will move to the lab and help DMM operate it. The facility has three floors (see pictures above, click to enlarge); the Studio floor provides environmental testing and mass-production prototyping for hardware development, the Base floor has a shared office and event space, and the Hub floor provides consulting services on hardware development and sells electronic parts. (See this PDF file for a list of the facility’s equipment.) The process for hardware developments needs to cover a lot of ground, from prototyping, acquiring certification, tests to improve the quality, and operational knowledge…

dmm-make-akiba_featuredimage

See the original story in Japanese.

Here is good news for entrepreneurs aiming to develop hardware.

Japanese internet company DMM.com launched a hardware incubation space called DMM.make Akiba in Akihabara on Friday [1]. The facility will open on 11 November, and has started receiving membership applications.

DMM.make Akiba offers members a facility valued at $4.5 million comprising 150 machines for hardware production, such as 3D printers, testing devices for acquiring public certification for electric appliances, and platforms for mass production. In addition to providing office and event space, members can use the address of the facility to register their company. Tokyo-based hardware startup Cerevo and hardware-focused startup incubator ABBALab will move to the lab and help DMM operate it.

The facility has three floors (see pictures above, click to enlarge); the Studio floor provides environmental testing and mass-production prototyping for hardware development, the Base floor has a shared office and event space, and the Hub floor provides consulting services on hardware development and sells electronic parts. (See this PDF file for a list of the facility’s equipment.)

abbalab-machine

The process for hardware developments needs to cover a lot of ground, from prototyping, acquiring certification, tests to improve the quality, and operational knowledge for mass production. But equipments or experts for hardware developments are fragmented, which had been preventing startups from launching their hardware products unless they are a large manufacturer. In our recent interview with ABBALab CEO Osamu Ogasahara who has produced this facility, he explained that this is the place where entrepreneurs can create something like Softbank’s humanoid robot Pepper.

Cerevo supervises the project

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From the left: Cerevo CEO Takuma Iwasa, DMM.make Akiba producer / ABBALab CEO Osamu Ogasahara

Cerevo, the Japanese startup best known for its Cerevo Cam and IoT crowdfunding site Cerevo Dash, is also behind this project.

The company invited ABBALab’s Ogasahara to their board and started preparing a $20 million investment fund. Since its launch in 2007, Cerevo has been behind up-and-coming popular “connected” hardware products, though not all of them have been introduced under their name. Regarding these OEM products developed by Cerevo, few details are available due to their non-disclosure agreements with clients. However, users can learn a lot from what Cerevo has said about the new facility.

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ABBALab’s incubation initiatives

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Measurement equipments at DMM.make Akiba

ABBALab is a hardware-focused startup incubation program launched by Movida Japan CEO Taizo Son and Ogasahara. Coinciding with the launch of DMM.make Akiba, ABBALab started receiving applications for the next batch of the incubation program. The program consists of two key initiatives; “Scholarship” to support entrepreneurs sell the products and “Fellow” that helps entrepreneurs conduct hardware R&D.

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The Fellow initiative is unique in that it will ask the Scholarship participating startups to provide their engineering skills and resources to Fellow participating startups, and the former can receive funds from ABBALab in return for rendering their services. Participating supporters include Yoshihiro Kawahara (technical advisor for inkjet-printed circuit board startup AgIC), engineering company Progress Technologies, and Incubate Fund partner Masahiko Honma, and several VC firms.

To take part in the program, a team must pass a screening process. The Bridge will provide more details on the program soon.


  1. Disclosure: The Bridge has a business partnership with Nomad, the company that Ogasahara has managed. We are providing selected articles to DMM.make, a news curation site by Japanese internet company DMM.