Japan’s Gree Ventures targets $65 million for new fund, eyes opportunities in India

From the left: Gree Ventures CEO and partner Yusuke Amano, partner Tatsuki Tsutsumi

See the original story in Japanese.

Gree Ventures, the investment arm of Tokyo-based online gaming company Gree (TSE:3632), announced today that it has formed a new fund called AT-II Limited Investment Partnership. By the time of the first close, about 4 billion yen (about $37 million) had been committed as investment from Gree and Mizuho Financial Group, plus major Japanese companies and financial institutions, but the firm is expecting to reach about 7 billion yen ($64.5 million) by the end of this year.

As for which sectors to invest in, they will follow the scope of the previous fund, keeping the focus on seed- to early-stage B2B (business-to-business) or B2B2C (business-to-business-to-consumer) startups. However, they will begin investing in startups in India with the new fund in addition to their conventional geographical coverage of Japan and Southeast Asia. Gree Ventures CEO Yusuke Amano told The Bridge that the firm aims to invest 100 to 300 million yen respectively into an individual company as a lead investor, while offering their investees hands-on support including helping fulfill personnel needs and developing new accounts.

Gree Ventures recently invested in two Japanese startups, Sorabito and Ookami, from the new fund but how much these deals were have not been stated. Regarding expected regional allocation of investments, Amano says that they see putting 80% in Japan vs. 20% in the rest of Asia, or 70% in Japan vs. 30% in Asia with about half of this comprising Indian startups-related deals.

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In order to better respond to the expansion of investment activities both in size and in geographical spread, Gree Ventures added new people to the investment team this spring. In addition to Amano and partner Tatsuki Tsutsumi as core members, principal Albert Shyy (former Lazada Group director), associate Nikhil Kapur (formerly a business founder in India), associate Masyuki Minato (formerly working at Boston Consulting Group), Natsumi Negishi (formerly working at Nomura Research and Advisory) and analyst Yuya Mineshima (formerly working at Goldman Sachs) joined the team. On June 1st, the firm will relocate their office from Gree Headquarters in Roppongi Hills to KaleidoWorks in the Arkhills business complex where Japan Venture Capital Association, B Dash Ventures and Incubate Fund are based together.

AT-I Limited Investment Partnership, the firm’s previous fund, was formed in 2014 at 5 billion yen (about $49 million in terms of the exchange rate then), and managed by Amano and Tsutsumi as well as Gree director Naoki Aoyagi and principal Alan Kuan Hsu in charge of deals in the Southeast Asian region (Hsu quit Gree Ventures last November to join KK Fund). They have invested in 16 startups in Japan and 9 startups in Southeast Asia from the previous fund, and could already collect a 40% return on these investments while there are still more than eight years remaining until the redemption period.

KaleidoWorks’ lounge area (Image credit: Mori Bldg.)

According to Tsutsumi, the firm halted new investments temporarily over the last six months in preparation for the new fund, but commencing with the recent Sorabito and Ookami deals, they want to resume aggressive investments in startups focusing on the following three pillars: Industrial Renovation (AdTech, Digital Health and FinTech), Mobile Re-design (mobile optimization of existing services for desktop use) and People Empowerment (crowdsourcing, etc). Thanks to the upcoming relocation to KaleidoWorks which has a lounge space, they are expected to gain more touch points with startups and entrepreneurs.

Edited by “Tex” Pomeroy