Tokyo-based Hakki Africa, the Japanese startup offering micro-finance services for cab drivers in Kenya, announced on Tuesday that it has secured 1.58 billion yen (about $10.6 million) in the 1st close of its series B round. This round is led by SBI Investment with participation from QR Investment (by Hokkoku Financial Holdings), Deepcore, Hakobune, Music Securities in addition to debt from an undisclosed Japanese megabank and Hokkoku Bank.
For the company, this follows their seed round in December of 2020 (secured 30 million yen) and Series A round in March of 2022 (secured 220 million yen including debt). The latest round brought their funding sum up to date to more than 1.83 billion yen (about $12.3 million).
In Africa, it is very difficult to borrow unsecured loans due to the underdevelopment of financial services. The company offers a micro-finance service focused on used cars in the continent, especially in Kenya. It offers a loan screening based on a cab driver’s credit rating, with points deducted for multiple debts based on the history of the M-PESA mobile money usage, and points added for stability of cab sales on a weekly basis, offering the opportunity to purchase a car.
In this particular area, some of our readers may recall a startup called Moove, offering vehicle financing to private business owners in several African countries. Backed by Japan’s Mitsubishi UFJ Innovation Partners, the company recently secured $10 million in debt in August this year.
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. Just prior to the summer we announced our new Sprout initiative at Shizen Capital. Our hypothesis was that female venture capitalists were far too scarce in Japan, and not for lack of talent. We believe that diversity in venture capital teams is important for maximizing financial performance of a fund, as well as for identifying and supporting women and minority startup founders, who are also disadvantaged in venture ecosystems worldwide, and by extension funding innovative projects which merit backing yet fall off the conventional radars. The diversity issue in our view is complex and systemic, and there is no single magic bullet of a solution to address it. However, as active investors in the market, we believe that we hold some…
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.
Just prior to the summer we announced our new Sprout initiative at Shizen Capital.
Our hypothesis was that female venture capitalists were far too scarce in Japan, and not for lack of talent. We believe that diversity in venture capital teams is important for maximizing financial performance of a fund, as well as for identifying and supporting women and minority startup founders, who are also disadvantaged in venture ecosystems worldwide, and by extension funding innovative projects which merit backing yet fall off the conventional radars.
The diversity issue in our view is complex and systemic, and there is no single magic bullet of a solution to address it. However, as active investors in the market, we believe that we hold some accountability for the problem and hence have a role to play in solving it. Rather than discussing the topic ad infinitum in pursuit of the perfect solution, we chose to act.
Accordingly, we expect that the first incarnation of our Sprout initiative will be imperfect, but we are confident that we can improve and refine it along the way. We’re essentially applying The Lean Startup methodology toward addressing the complex problem of lack of diversity in venture capital. We’ve structured the Shizen Capital Sprout initiative as an apprenticeship program for emerging female VC fund managers.
Although only a few months in, we’ve already witnessed several market characteristics validating our initial hypothesis.
Shizen Capital held a gathering on April 26, where the firm’s limited partners listened to some of their several portfolio companies making pitches. The picture above shows Braid Technologies, one of the firm’s portfolio. Image credit: Braid Technologies
For one, the volume of inbound applicants from truly impressive individuals debunks any myth of a scarcity of female VC talent in Japan. Our single blog post announcing the program — not even in Japanese for a role requiring native fluency — has appeared to tap an artery. As a small team, we regret that we could not hold extensive conversations with every candidate, but among the short list of those with whom we did, we found it difficult to narrow our selection to only one. For the others — and you know who you are — we are deeply grateful for the opportunity to have explored a collaboration with each of you. In our philosophy, there is a non-negligible chance that destiny will bring our professional paths together again in the future.
Another discovery during this preliminary phase: a tendency toward organizational hierarchy pervades the market. An elaborate degree of hierarchy is understandable in large and incumbent corporations. In venture however, our view is that excessive hierarchy serves as an impediment to investing in innovation. In other emerging venture ecosystems, we’ve witnessed how this can contribute to a dearth of early-stage capital, insufferably long due diligence cycles, and a proliferation of unwieldy investment syndicates that eschew stepping outside comfort zones. We respectfully encourage flatter fund organizations before this becomes a problem in Japan.
One final observation: several applicants approached us by leading with an apology that they lacked direct VC experience. This illustrates exactly the vicious cycle we are hoping to break ! The entire raison d’être of Sprout is to enable candidates with the right attitude and aptitude to become VC fund managers, regardless of their prior experience and career background.
As the inaugural Sprout participant, Mayumi has joined Shizen Capital as a full-time Investment Director on a track to become full GP. Mayumi impressed us with her global mindset as well as her long-term ambition to build a VC fund focused on the African market, in pursuit of financial return and social impact, a commendable aspiration which Shizen endeavours to support in the future.
We are thrilled to count Mayumi as our newest member of the Shizen Capital family! Please feel free to introduce yourselves when you see her out at events.
Japanese startup Dots for, the company aiming to help digitalizing rural villages in Africa with distributed communications using mesh network technology, announced on Friday that it has secured 100 million yen (about $670,000 US) in a seed round. Participating investors arew Anobaka, Quantum Leap Ventures (QXLV), G-Startup Fund, and unnamed several angel investors. QXLV followed their previous investment in the startup’s pre-seed seed round in September of 2022. The company says that it will use the funds to help people in rural areas of African gain access digital services and spend daily lives comparable to those in cities. It also expects to contribute to improving the incomes of rural residents through allowing them to remotely obtain jobs from developed countries and urban areas in Africa through efforts including matching sales of agricultural products. Dots for was founded in October of 2021 by Carlos Oba, who has worked at Amazon, Recruit, and C Channel, among others, in business startups and management. Prior to launching Dots for, he led the launch of a service for motorcycle cab operators in Tanzania and other countries as a new business manager at Wassha, the Japanese startup delivering electricity to off-grid areas in Africa. While urban…
Image credit: Dots for
Japanese startup Dots for, the company aiming to help digitalizing rural villages in Africa with distributed communications using mesh network technology, announced on Friday that it has secured 100 million yen (about $670,000 US) in a seed round. Participating investors arew Anobaka, Quantum Leap Ventures (QXLV), G-Startup Fund, and unnamed several angel investors. QXLV followed their previous investment in the startup’s pre-seed seed round in September of 2022.
The company says that it will use the funds to help people in rural areas of African gain access digital services and spend daily lives comparable to those in cities. It also expects to contribute to improving the incomes of rural residents through allowing them to remotely obtain jobs from developed countries and urban areas in Africa through efforts including matching sales of agricultural products.
Dots for was founded in October of 2021 by Carlos Oba, who has worked at Amazon, Recruit, and C Channel, among others, in business startups and management. Prior to launching Dots for, he led the launch of a service for motorcycle cab operators in Tanzania and other countries as a new business manager at Wassha, the Japanese startup delivering electricity to off-grid areas in Africa.
While urban areas in African countries are experiencing economic development and digitalization, rural areas with low incomes are facing a variety of unresolved issues, including Internet connectivity. The company uses mesh network technology to build wireless network infrastructure called d.CONNECT in rural villages in Africa at an overwhelmingly low cost and in a short period of time.
Tokyo-based VC firm Nextblue announced on Tuesday that it has launched its second fund. It has not yet reached its final close but aims to eventually reach a size of 5 billion yen (about $33.6 million US). The new fund aims to create social impact to improve the women’s wellbeing in Japan through the realization of DEIB (Diversity Equity Inclusion and Belonging). Three business companies including electric power company JERA and Japanese leading PR firm Sunny Side Up Group (TSE: 2180) and several anonymous individual investors have invested in the latest fund. JERA is a 50-50 power generation company owned by TEPCO Holdings (TSE: 9501) and Chubu Electric Power (TSE: 9502). JERA currently has 26 thermal power plants across Japan. The company’s goal is to achieve zero-emission power generation by 2050 through thermal power generation mixing hydrogen with natural gas, zero-emission thermal power generation using hydrogen and ammonia as fuel, and the introduction of renewable energy. The investors in the latest fund are expected to provide an environment for Japanese and European portfolio companies to conduct PoCs (proof of concepts) on women’s wellbeing businesses. Nextblue’s managing partner Kanako Inoue says that JERA’s participation indicates that the power company is committed…
Nextblue’s managing partners: From left, Vincent Tan, Kanako Inoue, Yuichi Kori Image credit: Nextblue
Tokyo-based VC firm Nextblue announced on Tuesday that it has launched its second fund. It has not yet reached its final close but aims to eventually reach a size of 5 billion yen (about $33.6 million US). The new fund aims to create social impact to improve the women’s wellbeing in Japan through the realization of DEIB (Diversity Equity Inclusion and Belonging).
Three business companies including electric power company JERA and Japanese leading PR firm Sunny Side Up Group (TSE: 2180) and several anonymous individual investors have invested in the latest fund. JERA is a 50-50 power generation company owned by TEPCO Holdings (TSE: 9501) and Chubu Electric Power (TSE: 9502).
JERA currently has 26 thermal power plants across Japan. The company’s goal is to achieve zero-emission power generation by 2050 through thermal power generation mixing hydrogen with natural gas, zero-emission thermal power generation using hydrogen and ammonia as fuel, and the introduction of renewable energy.
The investors in the latest fund are expected to provide an environment for Japanese and European portfolio companies to conduct PoCs (proof of concepts) on women’s wellbeing businesses. Nextblue’s managing partner Kanako Inoue says that JERA’s participation indicates that the power company is committed to changing the world from within the company, as it has been working on new challenges in the energy industry,.
The first fund invests in 39 companies, 4 companies exited
The firm’s first fund was launched in April of 2020 and subsequently announced its first close in March of 2021. The fund size at that point was estimated at 3 billion yen ($28 million in the exchange rate at that time). According to Inoue, investments were made in 39 companies from the first fund, of which about half were Japanese startups and the other half were European startups.
In terms of vertical category, she said, most of their Japanese investees were SaaS startups, in line with industry trends in Japan, while their investments in Europe were largely made into the healthcare and food sectors. This is because, while DTx (Digital Therapeutics) startups have emerged, they are not always effective in treating chronic diseases and other conditions, so the focus was more on somewhat mix of healthcare and food, which usually provides something directly consumed by the body.
In a recent interview with Bridge, Inoue says,
With the first fund, we wanted to prove that Japanese VCs were valuable to European startups and that we could bring European startups to the Japan market.
During the pandemic, some of our portfolio companies struggled to raise funds in Europe and the US, but it was relatively easy for them to access funds in Japan. I think we were able to prove the importance of diversifying the Cap Table .
From the firm’s first fund’s portfolio, INFORICH (TSE: 9338), operator of the ChargeSPOT mobile battery sharing service in Japan, IPOed, while Lana Lab (process mining company, Germany), First A (quick commerce for drugs, Germany), and Bento (aggregating multiple web links into one link, Switzerland), have been respectively acquired by other companies.
MUFG Innovation Partners (MUIP) recently announced that it has just launched its fund III, following its fund II announced in August of 2021. The new fund is expected to have a size of 20 billion yen (about $135 million), the same as each of the previous two funds. The new fund is managed by Mitsubishi UFJ Innovation Partners with financially backed from MUFG Bank and other group companies. In contrast to Mitsubishi UFJ Capital (MUCAP), which usually makes pure investments, MUIP is a corporate venture capital focused on strategic investments exploring collaboration with MUFG companies. MUIP’s AUM (assets under management), including its three core funds and fund of funds (FoF) for the US and Israel markets, now totals approximately 80 billion yen (about $540 million). According to Takashi Sano, Chief Investment Officer at MUIP, the new fund will more focus on investments in Japan and the U.S., following the establishment of the MUFG Ganesha Fund ($300 million US) for India and the MUIP Garuda 1 Fund ($100 million US) for Southeast Asia from last year through this year. In addition, the MUIP Fund II has increased the ratio of investments in Japanese startups compared to the Fund I although it…
Creative Commons License Attribution 2.0 Generic (CC BY 2.0) Photo by yo & via Flickr
MUFG Innovation Partners (MUIP) recently announced that it has just launched its fund III, following its fund II announced in August of 2021. The new fund is expected to have a size of 20 billion yen (about $135 million), the same as each of the previous two funds. The new fund is managed by Mitsubishi UFJ Innovation Partners with financially backed from MUFG Bank and other group companies.
In contrast to Mitsubishi UFJ Capital (MUCAP), which usually makes pure investments, MUIP is a corporate venture capital focused on strategic investments exploring collaboration with MUFG companies. MUIP’s AUM (assets under management), including its three core funds and fund of funds (FoF) for the US and Israel markets, now totals approximately 80 billion yen (about $540 million).
According to Takashi Sano, Chief Investment Officer at MUIP, the new fund will more focus on investments in Japan and the U.S., following the establishment of the MUFG Ganesha Fund ($300 million US) for India and the MUIP Garuda 1 Fund ($100 million US) for Southeast Asia from last year through this year. In addition, the MUIP Fund II has increased the ratio of investments in Japanese startups compared to the Fund I although it is unclear whether or not this trend will be applied to the Fund III.
MUFG’s investment and financing initiatives for startups (Amounts represent the total amount of investment including unexecuted amounts) Image credit: MUFG Innovation Partners
Sano says,
MUFG has invested in Liquidity Capital, an Israeli FinTech startup investing in AI startups, from its Fund I and II, and has also invested in Mars Growth Capital, a joint venture established by MUFG Bank and Liquidity Capital in 2020. Mars Growth Capital is preparing a growth stage-focused fund (up to 20 billion yen or $134.6 million US) for the Japanese market while other MUIP-related initiatives are also increasing in Japan.
MUIP will continue to invest in non-fintech startups, including generative AI startups, to explore synergies with MUFG companies. It will also work with overseas banks in which MUFG Bank has invested, such as Bank of Ayudhya (Krungsri) in Thailand and Bank Danamon in Indonesia, to encourage these banks’ business partners to introduce new technologies from the startups in which they have invested.
MUIP has invested in more than 40 startups through several funds to date, and the total investment in 2022 reached about 10 billion yen ($67.3 million US). For middle-stage and later startups, MUIP has also made direct investments from MUFG Bank and others, bringing the total amount of its investment framework in startups and other digital companies to approximately 570 billion yen ($3.8 billion US).
As for large funds from major Japanese financial conglomerates, SMBC launched a $200 million corporate venture capital fund called SMBC Asia Rising Fund in Singapore in May, jointly with Incubate Fund. In April, Mizuho Financial Group established a $10 billion corporate venture capital called Mizuho Innovation Frontier. In both cases, their investments are intended to explore synergies with their core businesses respectively.
Tokyo-based Josys, the Japanese startup offering outsourced corporate IT service to manage employees’ IT devices and SaaS accounts, announced on Wednesday that it has secured 13.5 billion yen (about $91.7 million US) in a Series B round. This round is led by Global Brain and Globis Capital Partners with participation from Jafco (TSE:8595), Raksul (TSE:4384), SMBC-GB Growth Fund (managed by SMBC Venture Capital Management and Global Brain), 31 Ventures (managed by Mitsui Fudosan and Global Brain), Norinchukin Capital, Z Venture Capital, WiL (World Innovation Lab), NTT Docomo Ventures, Value Chain Innovation Fund (managed by Seino Holdings and Spiral Innovation Fund), and Yamauchi-No.10 (owned by Nintendo founder’s family office). Global Brain, Yamauchi-No.10, and WiL followed this previous investment in Josys’ previous Series A round. The latest round brought the company’s funding sum up to date tp 17.9 billion yen (about $120 million US). Most of the investors are not operating company-backed but purely investment companies, which means that they are expecting business growth rather than business synergies with enterprises. Josys will use the funds to expand its global presence and diversify the company size of their targeted potential users. The service was initially launched in September of 2021 as the fourth…
Josys CEO Yasukane Matsumoto Image credit: Masaru Ikeda
Tokyo-based Josys, the Japanese startup offering outsourced corporate IT service to manage employees’ IT devices and SaaS accounts, announced on Wednesday that it has secured 13.5 billion yen (about $91.7 million US) in a Series B round.
This round is led by Global Brain and Globis Capital Partners with participation from Jafco (TSE:8595), Raksul (TSE:4384), SMBC-GB Growth Fund (managed by SMBC Venture Capital Management and Global Brain), 31 Ventures (managed by Mitsui Fudosan and Global Brain), Norinchukin Capital, Z Venture Capital, WiL (World Innovation Lab), NTT Docomo Ventures, Value Chain Innovation Fund (managed by Seino Holdings and Spiral Innovation Fund), and Yamauchi-No.10 (owned by Nintendo founder’s family office).
Global Brain, Yamauchi-No.10, and WiL followed this previous investment in Josys’ previous Series A round. The latest round brought the company’s funding sum up to date tp 17.9 billion yen (about $120 million US). Most of the investors are not operating company-backed but purely investment companies, which means that they are expecting business growth rather than business synergies with enterprises. Josys will use the funds to expand its global presence and diversify the company size of their targeted potential users.
The Josys management team Image credit: Masaru Ikeda
The service was initially launched in September of 2021 as the fourth business of Japanese online printing and on-demand logistics company Raksul (TSE:4384). Earlier this year, it was spun off from and incorporated as a subsidiary of Rakusul. In March of 2022, Josys increased its capital through a third-party allotment to undisclosed investors to become an equity-method affiliate from a consolidated subsidiary of Raksul (35.6% of voting rights at that time). Raksul’s voting right ownership in Josys has been apparently diluted after the Series A round.
The service allows companies to integrate and outsource management, procurement, and kitting IT devices and SaaS accounts for their employees. It aims to improve the operational efficiency of a company’s IT management department, expecting to reduce the workload of corporate IT departments by about a quarter through cloud computing and outsourcing. The company expects it may help companies reduce the turnover rate of staff in charge of IT systems.
The company’s new global expansion effort includes their service launch in 40 countries in the North America and Asia Pacific regions. The entire Josys team is about 120 people. Of these, 30 are in Japan, 70 in India, 10 in Vietnam, and the rest of the team are based in San Francisco Bay Area. Many of the systems required have been developed in India while the overall service design is being done in the Bay Area. Sales and on-boarding processes in the Asia Pacific Region are provided by their teams in Singapore and Malaysia.
Josys’ upcoming business domain by including larger enterprises as a target Image credit: Masaru Ikeda
Josys has been focused on small and medium-sized businesses with less than 300 employees but will now target larger enterprises going forward. In some large enterprises, SaaS is not centrally managed by the system department (so called ‘shadow IT’), and the collapse of IT governance is becoming an issue. The company believes that the integration of employee-based information ledgers will contribute to the reconstruction of the Single Source of Truth (SSOT) for IT management.
The Josys management in Japan. From left, VP of Japan Marketing Michibumi Serizawa, CEO Yasukane Matsumoto, Japan SVP Kiyomitsu Takayama, and VP of Japan Sales Mikito Hayashi. Image credit: Masaru Ikeda
To strengthen the team, the company appoints Kiyomitsu Takayama, former Japan head of Pendo.io Japan, as Japan SVP at Josys; Mikito Hayashi, former Executive Officer and General Manager of Enterprise Sales at ZVC Japan, as VP of Japan Sales at Josys; and Michibumi Serizawa, former General Manager of Major Account Sales at Palo Alto Networks, as Japan Sales at Palo Alto Networks. In addition, the company will launch the Josys Academy to share knowledge and insights to help Japanese companies adopt digital transformation.
Josys initially introduced the concept of its business in September of 2021 and subsequently launched it in 2022, seeing a 10-fold increase in ARR (annual recurring revenue) over the past year (specific values not disclosed). The company attributed the growth to the management burden of IT devices and SaaS, the increase in IT deployment in each department, and the dispersion of IT managers, while many companies have massively adapted work-from-home and SaaS as the new normal after COVID-19.
The Bridge
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.”
Masaru Ikeda
