Capitalizing on culture: Can new $60M fund help make Kyoto an innovation center?

Miyako Capital's Kenshin Fujiwara, Hiroaki Okahashi
Miyako Capital’s Kenshin Fujiwara, Hiroaki Okahashi

As we return from our trip down to Osaka for B Dash Camp, there’s more news emerging from Western Japan, this time from Kyoto. A new venture fund of $60 million was officially announced today, initiated by Kyoto University with the goal of supporting entrepreneurial activity from that university and the Kyoto area. The sectors of focus for the fund will be information/communication technology, life science and biotech, agricultural food, and environment and energy.

Kyoto University has designated the newly formed Miyako Capital to manage the fund. I recently had a chance to speak with Hiroaki Okahashi (managing partner) and Kenshin Fujiwara (partner) to learn more about this initiative.

Their team will also include director Norihiko Ishihara, and the president of the company will be Satoshi Yamaguchi, who brings much cross-border experience from his years at JAFCO. Unlike many VCs with primarily a finance background, many on the Miyako Capital team have experience starting and managing companies, which they see as a big differentiation with other VCs.

A Cultural Edge

Kyoto is typically known as a prime sight-seeing spot, rich in history, with a unique aesthetic, and a zen atmosphere. Okahashi explains that he’s very interested in Western Japan, in particularly Kyoto, where famous technology innovators like Steve Jobs and Larry Ellison have sought and found inspiration. He adds that the city’s cultural edge helps “give it the potential to be a center of innovation,” a place where cultural authenticity and new business ideas can merge.

Kyoto's Kinkakuji, or Golden Pavillion, one of many cultural attractions
Kyoto’s Kinkakuji, or Golden Pavillion

Of course, the image of an industrial East (Tokyo) contrasted with a creative-minded West sort of brings to mind the dichotomy that exists in the US.

Kyoto, of course, has a long way to go, but Kyoto University is renowned for its advanced research, even beyond Japan’s borders. Okahashi says that while Miyako Capital’s first few investments will likely be from Kyoto University (or some Kyoto entrepreneurs), they will not limit their investment criteria domestically:

If there are any companies that might represent synergies by adding the Kyoto brand or Kyoto University technology, we are willing to invest in technologies outside Japan.

He adds that there are many potential investors to this fund, like manufacturers looking for new technologies and businesses, lacking the experience to invest or source such businesses. Miyako Capital will aspire to fill that gap for them, given that they have access to IP derived and accumulated at Kyoto University.

In the technology world these days, Kyoto is perhaps best known as the home of giant companies like Nintendo and Kyocera. But it is also the home of internet company Hatena, which has a new office in Tokyo leading to its expected IPO coming soon [1]. Fujiwara says that that’s the kind of movement that they’d definitely like to see more Kyoto companies follow. When I inquired about promising Kyoto startups these days, both he and Okahashi pointed to Nota, whose Gyazo screenshot service is currently seeing heavy use by many here in Japan.

Both Okahashi and Fujiwara say they would like to see more entrepreneurs coming to Kyoto as well, and I really don’t think that’s a very difficult sell. Kyoto is a pretty incredible place, and I think given the chance, entrepreneurs the world over would love a chance to spend some time there. Hopefully this new fund can be a catalyst for more interest in the city — via Kyoto University — from both here in Japan as well as abroad.

  1. Coincidentally, we had a chance to hear Nintendo president Satoru Iwata speak earlier this week in Osaka. You can read all about that here. My personal favorite Kyoto company right now is game developer Ponos. Their Battle Cats game is incredible. We’re also big fans of QOOQ and its Yesterscape app.  ↩