Los Angeles-based Cashi Cake, the startup behind Misaky Tokyo and other D2C-focused Japanese confectionery brands, announced on Wednesday that it has secured 120 million yen (about $1 million) in the first tranche of its seed round. Participating investors include Chiba Dojo Fund, Coconala Skill Partners (CSP), Headline Asia in addition to angel investors including Hiromi Okuda and Shin Murakami.
This follows two angel rounds when the startup received 60 million yen (about $600,000) in total from ISGS Investment Works, Jun Nishikawa, Kazuma Yamauchi, Kotaro Tamura, Yoichiro Hirano, Heart Catch and others. The latest tranche brought their total funding sum up to 180 million yen (about $1.6 million). The company will use the funds to expand confectionery manufacturing capacity as well as strengthening the development effort of a seaweed drink brand.
Founded by Alyssa Miky in September of 2019, Cashi Cake uses a proprietary technology to process seaweed agar to develop high-end Japanese confectionery products. After serving the Academy Awards and Emmy Awards eve as a vendor, her company has collaborated with Kim Kardashian’s fragrance brand KKW and been featured in the Bon Appétit food magazine. The company has 310,000 followers on its Tiktok account.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). He is the Managing Partner of Shizen Capital (formerly known as Tachi.ai Ventures) in Japan. You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. Years ago I started publishing an annual list of technology predictions from global venture capitalists. By design, I deliberately prioritize VCs beyond the usual Silicon Valley household names, whose voices were not necessarily heard on the world stage. For this season’s set of predictions, I am again pleased to be able to give the floor to an all-female cast of investors, who in my opinion are poised to make a disproportionately positive impact on the venture ecosystem this year. May 2022 bring us further enlightenment. Happy new year ! –mark Yumiko Murakami — MPower Partners, Japan ESG investments, which showed record growth in 2021, will continue to gain momentum in 2022. At the same time, criticism of greenwashing will increase,…
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.”
He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). He is the Managing Partner of Shizen Capital (formerly known as Tachi.ai Ventures) in Japan. You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
Years ago I started publishing an annual list of technology predictions from global venture capitalists. By design, I deliberately prioritize VCs beyond the usual Silicon Valley household names, whose voices were not necessarily heard on the world stage.
For this season’s set of predictions, I am again pleased to be able to give the floor to an all-female cast of investors, who in my opinion are poised to make a disproportionately positive impact on the venture ecosystem this year.
May 2022 bring us further enlightenment. Happy new year !
–mark
Yumiko Murakami — MPower Partners, Japan
ESG investments, which showed record growth in 2021, will continue to gain momentum in 2022. At the same time, criticism of greenwashing will increase, and the quality of ESG investments will be questioned in 2022.
ESG has so far been focused on listed companies. This year, ESG will begin to be introduced to the private market in earnest.
Tonna Obaze — Harlem Capital, NYC, USA
I believe the world will continue its Web3 evolution with blockchain technology, cryptocurrency, & NFTs. However this year, the focus will not be awareness but more mass adoption. I’m excited to see new players emerge who make Web3 accessible for everyone — those who communicate concepts in plain language to help the “non expert” understand and those who build infrastructure to make onboarding seamless. Once upon a time, only few had access to computers and even fewer had them within their homes — Apple sought out to change that and make computers accessible to everyone. Time will tell who will step up and do the same for Web3.
Emiko Takeda — Monex Climate Impact, Japan
I personally expect a lot of interesting innovation in sustainable food. For instance, I see projects which transform empty sea urchins, traditionally a scourge of algae vital to sea life and a headache for fishermen, into highly-prized sea urchins for sushi based on an all-natural alimentation program. Another example is a project producing delicious plant-based cheese alternatives from sticky rice by employing koji malt often used in Japan for fermentation of miso and sake.
Abi Mohamed—Tech Nation, UK
2021 was a remarkable year for European startups, with a record $100B of capital invested, 100 new unicorns (Atomico Report 2021), but there was still a lack of investment in underrepresented founders, the biggest disparity was towards founders who self identifies as Black. We still saw incredible funding deals to UK Black founders, i.e. Marshmallow and AudioMob. My prediction for 2022 is that we will see more UK Black founders being funded by micro/solo funds, ex-founder turned angel investors or international institutional funds.
Mai Iida — D4V, Japan
2021 saw the rise in new content driven by individuals and communities (think NFTs, EdTech cohort programs, Japan’s “Oshikatsu” or fan activities in pop culture, etc). The diversification of opportunities has put creators in a strong position to pick and choose what is best for them. People are also revisiting their way of work and life, such as the “Great Resignation” in the US, choosing a career that suits their lifestyle best. In 2022 I look forward to seeing these two trends merging – we may see more people choosing novel ways of work, treating their hobbies just as seriously as their so-called “actual” jobs. This is an interesting and hot area for startups to contribute their innovative ideas.
Tokyo-based Commmune, the Japanese startup behind a customer success support platform under the same name, revealed on Friday that it is expanding into the US market. The company has raised funds from several investors, including DNX Ventures, in Series A and Series B rounds. Yuya Takada, founder and CEO of Commmune, plans to move to the U.S. himself and start operations at DNX Ventures’ Silicon Valley office in San Mateo, CA. The specific timing of the start of activities has not yet been determined due to logistical arrangements but is expected to be early next year. Commmune was founded in May of 2018 by Yuya Takada (CEO) and Shota Hashimoto (initially COO, now CPO), both of whom graduated from the University of Tokyo and had previously worked in the U.S. prior to the startup. Commmune currently has about 100 employees and contractors working in its Japan office. After the announcement, Takada will focus on decision making and market fit effort for the US market while Hashimoto will supervise team building in the Japan office. The startup offers companies with a online community environment to improve their user engagement, enabling them to get their words out as well as receiving responses…
Yuya Takada, Founder and CEO of Commmune Image credit: Commmune
Tokyo-based Commmune, the Japanese startup behind a customer success support platform under the same name, revealed on Friday that it is expanding into the US market. The company has raised funds from several investors, including DNX Ventures, in Series A and Series B rounds. Yuya Takada, founder and CEO of Commmune, plans to move to the U.S. himself and start operations at DNX Ventures’ Silicon Valley office in San Mateo, CA. The specific timing of the start of activities has not yet been determined due to logistical arrangements but is expected to be early next year.
Commmune was founded in May of 2018 by Yuya
Takada (CEO) and Shota Hashimoto (initially COO, now CPO), both of whom
graduated from the University of Tokyo and had previously worked in the
U.S. prior to the startup. Commmune currently has about 100 employees
and contractors working in its Japan office. After the announcement, Takada will focus on decision making and market fit effort
for the US market while Hashimoto will supervise team building in the
Japan office.
The startup offers companies with a online
community environment to improve their user engagement, enabling them to
get their words out as well as receiving responses from users, which is
quite challenging with conventional communication channels like blogs
and other platforms like Medium.com. For companies managing online
accounts for their users, the platform allows them to integrate their
member database to enable single sign-on login. The startup’s user base
of enterprises is growing as the pandemic has forced various companies
to keep in touch with their customers in a digital manner.
Commmune Image credit: Commmune
This
enterprise need is not limited to Japan, but is likely to exist in
Western markets that pursue a good customer journey. However, Takada
says platforms like Commmune do not yet exist in the Western market, and
some services with similar functions are not sufficiently recognized
and are small in scale. Given that there must be a market there, Takada
expressed his determination to go to SF Bay Area and take on the global
market before other startups from Europe and the US do it.
Takada says,
We know a Dutch startup called inSided. In contrast to our platform mainly serving B2C startups, they have more B2C services as users and their scale is still small. Some people say we have to dominate the Japanese market and IPO here first before expanding into the US market. However, I thought that we might not stand a chance if we do that after IPO. It will be too late because US startups grow at least three times faster than Japanese startups.
He continued,
We know a Dutch startup called inSided. In contrast to our platform mainly serving B2C startups, they have more B2C services as users and their scale is still small. Some people say we have to dominate the Japanese market and IPO here first before expanding into the US market. However, I thought that we might not stand a chance if we do that after IPO. It will be too late because US startups grow at least three times faster than Japanese startups.
Looking at the Japanese market, major tools in CRM (Customer Relationship Management), MA (Marketing Automation), SFA (Sales Force Automation), and among others are all provided by foreign firms. Commmune is solving a problem that is not dependent on the culture of a particular country. Even in the areas of customer success and community management, history tells us that we will eventually see strong players from outside the country if we don’t make a global expansion. We have no choice but to go now.
One of the reasons why Takada could make this decision was probably due to the changing perspective of Japanese investors. In the past, both entrepreneurs and investors used to prioritize the Japanese market which has a reasonably large domestic demand. More foreign institutional investors pouring larger sums of cash into Japanese VC firms, making it easier for them to understand the need to expand into the global market in terms of maximizing growth potential. A good recent example is Snkrdunk (pronounced as Sneaker Dunk), which secured funds from SoftBank Vision Fund 2 earlier this month and announced its full-scale expansion into the Asian market.
Takada does not believe that their product in Japan will work in the US without tailoring to the local context. It will need certain time to reach product-market fit. For this reason, he will appoint no country manager but hire and manage several local employees during the initial stage of market development because he hasn’t yet fixed what it looks like they want to offer to US businesses.
This is the abridged version of our original article in Japanese. Tokyo-based Soda, the Japanese startup behind a marketplace specializing in sneakers and streetwear called SNKRDUNK (pronounced as Sneaker Dunk), announced today that it has secured an undisclosed sum in a series D round from SoftBank Vision Fund 2 (SBVF2), which brought the company’s valuation up to 38 billion yen or $340 million US. This follows the company’s series C round back in July where it secured 6.2 billion yen (about $54 million US), meaning that their valuation became 1.6 times in just 4 months. The previous round was led by Korean tech giant Naver’s Kream with participation from Altos, SoftBank Ventures Asia, JAFCO Group, and existing investors including basepartners, Coloplast Next, and The Guild. The funds raised in the latest round will be used for expanding into the Asian markets such as Singapore, Australia, and Hong Kong in addition to strengthening business expansion effort in Japan, AI-based logistics, authenticity assessment, and customer support. This is SBVF2’s second investment in a Japanese startup following cash injection into biotech startup Aculys Pharma. SoftBank Vision Fund 1 (SBVF1) had been investing 100 billion yen in each startup on average, mainly focused on…
This is the abridged version of our original article in Japanese.
Tokyo-based Soda, the Japanese startup behind a marketplace specializing in sneakers and streetwear called SNKRDUNK (pronounced as Sneaker Dunk), announced today that it has secured an undisclosed sum in a series D round from SoftBank Vision Fund 2 (SBVF2), which brought the company’s valuation up to 38 billion yen or $340 million US.
This follows the company’s series C round back in July where it secured 6.2 billion yen (about $54 million US), meaning that their valuation became 1.6 times in just 4 months. The previous round was led by Korean tech giant Naver’s Kream with participation from Altos, SoftBank Ventures Asia, JAFCO Group, and existing investors including basepartners, Coloplast Next, and The Guild.
The funds raised in the latest round will be used for expanding into the Asian markets such as Singapore, Australia, and Hong Kong in addition to strengthening business expansion effort in Japan, AI-based logistics, authenticity assessment, and customer support. This is SBVF2’s second investment in a Japanese startup following cash injection into biotech startup Aculys Pharma.
SoftBank Vision Fund 1 (SBVF1) had been investing 100 billion yen in each startup on average, mainly focused on US-based unicorns which are valued over $1 billion. However, the average ticket size of the second fund (SBVF2) has been reduced to 20 billion yen ($177 million), and some of Japanese startups have been gradually becoming the fund’s potential investees.
In an interview with Forbes Japan, SBVF2’s managing partner Kentaro Matsui shared his fund’s five investment principles: 1. market size, 2. innovativeness of services, products, and technologies, 3. accelerating growth through AI (artificial intelligence) and data utilization, 4. entrepreneurs and management team with a clear vision, and 5. sustainability of the business and a clear path to profitability.
In the statement, Soda claims AI-based logistics as one of what the fund is used for. By optimizing the logistics process leveraging cutting-edge technologies, the company expects to allow customers to experience the new standard of trading – sell today, receive tomorrow. It’s unnecessary to say technology is the key to breakthroughs here.
According to the SoftBank Group’s financial results for the second quarter ending March 31, 2022, SVF1 and SFVF2 have 81 and 157 portfolio companies respectively.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). He is the Managing Partner of Shizen Capital (formerly known as Tachi.ai Ventures) in Japan. You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. There’s an old dig that venture capitalists like to make about private equity professionals: private equity folks boast about the size of their ego in AUM, whereas VCs know that what really matters is their IRR. Now let’s define these three-letter words. First, I’m using the word ego as a euphemism here to be gender agnostic (albeit in reality it’s usually only men who tend to make this brag). AUM means assets under management (i.e. the total amount of money in the funds managed by the general partner team). IRR means internal rate of return (i.e. the cash returns distributed to a fund’s investors, annualized). Asset managers care about AUM because it directly translates into guaranteed revenue. Closed-end investment funds…
This guest post is authored by Mark Bivens. Mark is a Silicon
Valley native and former entrepreneur, having started three companies
before “turning to the dark side of VC.”
He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). He is the Managing Partner of Shizen Capital (formerly known as Tachi.ai Ventures) in Japan. You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
Image credit: Pixnio
There’s an old dig that venture capitalists like to make about private equity professionals: private equity folks boast about the size of their ego in AUM, whereas VCs know that what really matters is their IRR.
Now let’s define these three-letter words. First, I’m using the word ego as a euphemism here to be gender agnostic (albeit in reality it’s usually only men who tend to make this brag). AUM means assets under management (i.e. the total amount of money in the funds managed by the general partner team). IRR means internal rate of return (i.e. the cash returns distributed to a fund’s investors, annualized).
Asset managers care about AUM because it directly translates into guaranteed revenue. Closed-end investment funds typically follow a “2 and 20 model,” meaning annual management fees of 2% and a share of 20% of the capital gains generated by the fund (aka carried interest). The annual management fees are a direct function of AUM, i.e. 2% of total AUM each year. They are contractually established for the life of the fund, usually 10 years. The carried interest is a direct function of fund performance, i.e. 20% of the capital gains generated by the fund.
Accordingly, a large AUM directly translates into a significant guaranteed revenue stream for the entire life of the fund. A fund manager with $1 billion in AUM is probably receiving around $20 million per year in recurring revenue. A micro VC fund of say $10 million is receiving only $200k per year in recurring revenue via its management fees.
Risk of misalignment
Since management fees are meant to cover the operations of the fund, excessively high management fees can translate into high salaries for the managing partners, luxurious offices, and lavish parties. Even if the fund’s financial performance is lackluster, a guaranteed annual revenue stream in the double-digit millions for several years makes for a fairly comfortable lifestyle. Do you see where a potential misalignment can emerge?
In contrast, a small VC fund can afford no such excesses. The managers of a small VC fund cannot become wealthy on management fees alone. They must perform. Only by generating significant capital gains on the funds they manage will they be able to generate wealth for themselves via the carried interest mechanism. IRR represents each fund’s financial performance.
For LP investors in private equity or VC funds who care about financial return, IRR is the metric that reflects their financial return, not AUM. So I submit that when a fund manager brags about their AUM, the appropriate rebuttal would be to ask their IRR.
Full disclosure: I too used to be guilty of the AUM flex. As a former GP in a fund that managed nearly $1 billion in AUM, I would often open my introduction at conferences by citing this figure. But over time, I learned that IRR represents my true KPI as a fund manager. IRR is the indicator of how well or how poorly I perform my job. It is not a mathematical anomaly that my best-performing funds have been those with smaller fund sizes, hence lower AUM.
In many ways actually, a propensity to chatter more about AUM than IRR is an indication of the stage of an ecosystem. When the venture market in a given region is still nascent, track records are limited, so the nearest metric people can look for is assets under management. However, once a fund manager has progressed beyond their first vintage, the more the relevant question to ask is, “So what is your IRR?”
Tokyo-based Astroscale Holdings, the Japanese startup offering space debris removal services, has secured approximately 12.4 billion yen (about $109 million) in a Series F round, which brought the startup’s valuation to 33.4 billion yen (about $295 million). This follows their series E round back in October of last year. Investors participating in the latest round are: DNCA Invest Beyound Global Leaders Environmental Energy Investment Siniphian AXA Life Insurance Innovation Engine OPS Seraphim Space Investment Trust Solaris ESG Master Fund Chiba Dojo Nomura Sparks Investment Prelude Structured Alternatives Master Fund Yamauchi-No.10 Family Office (the family office of Nindendo’s founder) Y’s Investment According to the company, the funding will enable the company’s global growth, including the development of technology for safe and cost-effective on-orbit services and the expansion of its own facilities for mass production in Japan, the UK and the US. Since its Series E round back in October of last year, the company’s workforce has grown by more than 60 percent, reaching about 250 employees globally. The company successfully launched and put into orbit the ELSA-d space debris removal satellite in March, and this month, followed by introducing its docking plate this month, which is designed to be pre-loaded onto…
ELSA-d Image credit: Astroscale Holdings
Tokyo-based Astroscale Holdings, the Japanese startup offering space debris removal services, has secured approximately 12.4 billion yen (about $109 million) in a Series F round, which brought the startup’s valuation to 33.4 billion yen (about $295 million). This follows their series E round back in October of last year.
Investors participating in the latest round are:
DNCA Invest Beyound Global Leaders
Environmental Energy Investment
Siniphian
AXA Life Insurance
Innovation Engine
OPS
Seraphim Space Investment Trust
Solaris ESG Master Fund
Chiba Dojo
Nomura Sparks Investment
Prelude Structured Alternatives Master Fund
Yamauchi-No.10 Family Office (the family office of Nindendo’s founder)
Y’s Investment
According to the company, the funding will enable the company’s global growth, including the development of technology for safe and cost-effective on-orbit services and the expansion of its own facilities for mass production in Japan, the UK and the US.
Since its Series E round back in October of last year, the company’s workforce has grown by more than 60 percent, reaching about 250 employees globally.
The company successfully launched and put into orbit the ELSA-d space debris removal satellite in March, and this month, followed by introducing its docking plate this month, which is designed to be pre-loaded onto low-Earth orbit satellites, one of the main possible sources of space debris.