Tokyo-based VC firm One Capital announced on Tuesday that it has reached the final close of its first fund at 16 billion yen (about $145 million US), more than three times oversubscribed from its original target 5 billion yen ($45.8 million US). According to Preqin, data resource for the alternative asset industry, the fund is the largest-ever single one managed by an independent firm in Japan.
One Capital was established in April last year by Shinji Asada, the former head of Salesforce Ventures Japan, and Wataru Sakakura, former managing director and partner at Boston Consulting Group. Asada and Sasakura serves the firm as CEO and COO, respectively. The firm says 70% of the fund’s amount would be targeted to enterprise software startups that can help realize the Future of Work”.
In addition to the investors joining the fund by the time of the first close last year, the firm introducecd medical kit maker Hogi Medical, a medical kit maker, the Organization for Small & Medium Enterprises and Regional Innovation, Japan (SME), En Japan (TSE:4849), Z venture capital (foremerly known as YJ Capital), and gas and power distribution company Saisan as new limited partners. Given that overseas individual and corporate investors account for over 40% of the fund’s investors, Asada told Bridge that it indicates overseas investors’ unparalleled expectations for the Japanese market.
One of One Capital’s symbolic investment policies is to focus on the SaaS vertical. Bessember Venture Partners, a long-established VC firm in the US known for having helped over 120 companies IPO, create an index from the stock prices of NASDAQ-listed SaaS companies and publishes it as EMCLOUD. Inspired by this, One Capital also started sharing an index based on the stock prices of listed SaaS companies in Japan, which clearly shows them growing more steadily than other stocks categorized in Nikkei 225 or Mothers.
Of the $10 billion enterprise software market in Japan (according to IDC Japan’s “Domestic Enterprise IT Market Forecast”, May 2020), SaaS businesses account for only 6%, at $5.5 billion (according to Fuji Chimera Research Institute’s “Software Business New Market 2020 Edition”). Rather than conventional packaged software, more and more companies prefer to use SaaS platforms where functions are constantly improved even after installation, and the Japanese market, with its large growth potential, is attractive to foreign investors, Asada says.
One Capital has has invested in the following eight companies from the first fund so far:
- Beatrust (Employee Search Engine)
- Boulder (Employee Success Tool)
- Tonari (life-size video conferencing system)
- ROXX (Reference Checking Tool)
- oVice (Virtual Office)
- Nota (FAQ system)
- Spir（Calendly-like appointment scheduling tool）
- Oura (ring-shaped IoT healthcare device)
The last of these, Oura, is unique in the list because it is a Finnish and also IoT startup. It can be also seen as a SaaS startup in terms of offering a dashboard to collect and analyze data from IoT devices. Furethermore, since it allocates a certain percentage of its first fund to investing in overseas startups aiming to enter the Japanese market, which encouraged the firm to join the Series C round of Oura.