Japan’s Beenos founder Teru Sato and partner Hiro Maeda form new $60M fund

From the left: Beenext managing partner Teruhide Sato, partner Hiro Maeda

See the original story in Japanese.

The founder of Beenos (TSE: 3328), Teruhide Sato, who has been active in funding startups primarily in Asia recently established a new fund called Beenext. Additionally, on September 7th, it was announced that Beenos will be investing $500,000 $5 million in Beenext.

Hiro Maeda, who for a long time has been active in investments with Beenos and acceleration programs with Open Network Lab, will take the position of partner at Beenext. In the future, Beenext will hold talks featuring discussions of investment strategy from the two investment partners who are busily flying all over the world.

No limit in choice

Generally, within funding there is something called investment territory. Whether by area, industry field, or funding round, however you slice it, the ways that recipients of funding are decided vary greatly depending on the fund. There are several merits to this, two major ones being the ability to leverage the expertise of partners who judge funding, and also that it’s easy for LPs (limited partners) to construct a portfolio. However it can’t be denied that in this case, funds that follow the rules may risk missing out on business opportunities.

According to Beenext’s managing partner Teruhide Sato, Beenext’s funding target startups are not limited by region, business field, or funding rounds, and it seems as though the source of Beenext’s capital may be the reason for that.

Sato explained:

Beenext’s LPs are American, Indonesian, Filipino, Singaporean, and Japanese private investors. They’re business founders and managers that I’ve gotten to know personally, and I understand that they want to support the next generation of entrepreneurs. Unlike where when you have capital raised from institutional investors, there are no restrictions on what kind of startup we can invest in.

Approaching their first close in July, Beenext’s first fund consisted of an investment plan with about 50% aimed at India, 30% to southeast Asia, and the last 20% for Japan and America. As for management of the fund, Sato will be on location handling India and southeast Asia while Maeda will be in charge of Japan and America. With bringing in many investments from LPs and co-investment funds from around the world, it seems there is no shortage of deal sources. Funding for 12 companies is already being implemented internationally.

Sato continued:

I think it’s good that there are a variety of roles in society, therefore every fund can play a different role. Beenext is a fund by entrepreneurs for entrepreneurs, and our core concept is about gathering capital from around the world and then spreading it around the world.

Beenext’s portfolio of startups

India economy to overtake China

A while back, the startup environment in India was virtually nonexistent. In a mono-cultural economy there were nothing but overpowering financial institutions, and the concept of risk money was basically nil. The cause of the complete turnaround from this state of affairs was the effect of Indian people living outside of India, or NRI (non-resident Indians).

Sato added:

I think the situation has really changed a lot compared to 10 years ago and 5 years ago. Before, if you mentioned India, it was thought of as a place for offshore development as Infosys and Tata were represent. 10% of India’s total population are mobile users, which is more than the total population of Japan, so NRIs have started realizing the market potential in their home country and have started going back there to do business.

Sato’s conception is that the people starting and operating startups in India are mostly students or graduates from either the India Institutes of Technology (IIT) or from Ivy league universities. Excellent engineers are many and they can also speak English, creating trends that meet the market’s needs, and growth speed that outpaces China.

He added:

Things that were happening in China are happening now in India. I think there is about a 10 year gap in there, but that gap is slowly but surely narrowing.

At The Bridge, we focus a lot on the southeast Asian market, but we don’t mean the market is saturated with investment opportunities for investors from Japan and Western countries. However with the current situation being that the speed of growth in India is faster than in southeast Asia, Beenext will be focusing roughly half of its funding on Indian startups.

With respect to diversity in the startup scene, it’s good that there are a variety of funding strategies and types. The parts of the market’s needs that aren’t being met get filled in. With Sato in India and Asia, and Maeda in Japan and America engaging in funding activity, we can expect Beenext to be making news around the world.

Indian Institute of Technology, Delhi(Image credit: IIT Facebook Page)

Translated by Connor Kirk