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Japanese Government opens entrepreneurs’ base in SF Bay Area

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The Japanese Government is establishing a center for entrepreneurs in Palo Alto called Japan Innovation Campus. Its arm METI, the Ministry of Economy, Trade and Industry, held a reception party to celebrate the launch of it on Sunday, inviting Yasutoshi Nishimura, the Japanese Economic Minister. Other guests included Palo Alto Mayor Lydia Kou, former U.S. Ambassador to Japan and the head of Geodesic Capital John Ruus as well as local Japanese investors and entrepreneurs. The venue is conveniently located just three blocks from University Avenue, a major thoroughfare in the city, and close to Stanford University, which is known for producing many startups. It is managed by Mori Building and Accenture under contract from METI. About five companies will be selected as office members that can use private offices, and 50 companies will be selected as co-working members that can use shared space (up to three people per company) while applications have been already closed. The venue was established as part of the Japanese government’s “Five-Year Startup Development Plan,” and has been designated as one of the venues for J-StarX, a program promoted by the Ministry to send Japanese entrepreneurs to startup hubs in the overseas. By linking Japanese entrepreneurs,…

Japan Innovation Campus
Image credit: METI

The Japanese Government is establishing a center for entrepreneurs in Palo Alto called Japan Innovation Campus. Its arm METI, the Ministry of Economy, Trade and Industry, held a reception party to celebrate the launch of it on Sunday, inviting Yasutoshi Nishimura, the Japanese Economic Minister. Other guests included Palo Alto Mayor Lydia Kou, former U.S. Ambassador to Japan and the head of Geodesic Capital John Ruus as well as local Japanese investors and entrepreneurs.

The venue is conveniently located just three blocks from University Avenue, a major thoroughfare in the city, and close to Stanford University, which is known for producing many startups. It is managed by Mori Building and Accenture under contract from METI. About five companies will be selected as office members that can use private offices, and 50 companies will be selected as co-working members that can use shared space (up to three people per company) while applications have been already closed.

The venue was established as part of the Japanese government’s “Five-Year Startup Development Plan,” and has been designated as one of the venues for J-StarX, a program promoted by the Ministry to send Japanese entrepreneurs to startup hubs in the overseas.

By linking Japanese entrepreneurs, students, and others with local accelerators, VCs, universities, JETRO and other government agencies, the program aims to support the global expansion of Japanese startups and the development of the ecosystem. Through organizing events, it also aims to encourage open innovation between the two sides of the Pacific.

Sagri partners with Thai conglomerate to roll out satellite data-based farm soil analysis

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Sagri, the Japanese startup behind a satellite-based agricultural analytics platform under the same name, announced on Monday that it has agreed to conduct a proof-of-concept(PoC) project with Thailand’s largest conglomerate CP Group (Chalung Pokaphan Group). The startup will conduct tests of satellite data-based soil analysis with CP Group’s BKP (Bangkok Produce Merchandising). The tests will be conducted on corn farmland in the northeastern part of Thailand to confirm that Sagri’s soil analysis method can be performed more quickly and inexpensively than conventional ways. In the future, based on the the analysis result, the startup envisions a project to generate carbon credit derived from farmland by optimizing fertilizer application. This partnership was revealed during the 5th batch Demo Day of Rock Thailand, an open innovation-focused pitch event run by the Embassy of Japan in Thailand and CP Group since 2019. The event is part of the

Image credit: Sagri

Sagri, the Japanese startup behind a satellite-based agricultural analytics platform under the same name, announced on Monday that it has agreed to conduct a proof-of-concept(PoC) project with Thailand’s largest conglomerate CP Group (Chalung Pokaphan Group). The startup will conduct tests of satellite data-based soil analysis with CP Group’s BKP (Bangkok Produce Merchandising).

The tests will be conducted on corn farmland in the northeastern part of Thailand to confirm that Sagri’s soil analysis method can be performed more quickly and inexpensively than conventional ways. In the future, based on the the analysis result, the startup envisions a project to generate carbon credit derived from farmland by optimizing fertilizer application.

This partnership was revealed during the 5th batch Demo Day of Rock Thailand, an open innovation-focused pitch event run by the Embassy of Japan in Thailand and CP Group since 2019. The event is part of the 2nd batch of Rock Thailand in 2019. Starting with this opportunity, Sagri has begun researching its entry into the Thai market, established a Singapore subsidiary in January, and has been in ongoing discussions with CP Group.

Following securing 100 million yen ($1.4 million US in the exchange rate at the time) in a seed round in June of 2021, Sagri formed a capital and business alliance with Softbank’s SB Technology in 2022, and was subsequently selected for the 4th batch of the accelerator program run by Japan Agricultural Co-operatives for business collaboration.

Japan’s Stockmark launches open-source LLM with 13 billion parameters, less hallucinations

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Tokyo-based Stockmark, the Japanese startup developing and offering sentence analysis AI solutions for businesses, launched a proprietary large language model (LLM) with 13 billion parameters called Stockmark-13b on Friday. This is the largest scale of any single Japanese language LLM and has been developed with assistance by the AWS LLM Development Support Program. Leveraging disclosed company information and patent updates the company has been collecting, the model is able to return more accurate answers to business questions compared other LLMs by suppressing so-called hallucinations. In addition, the new model can generate text about four times faster than ChatGPT. In August, Stockmark also introduced gpt-neox-japanese-1.4b, a Japanese LLM with 1.4 billion parameters based on the GPT-NeoX LLM learning library. Subsequently, the company was qualified by Amazon Web Services Japan for its LLM Development Support Program in September where they have been developing an LLM that can answer questions on business with higher accuracy and speed using the cloud platform’s proprietary AI accelerator Trainium. The company intends to build LLM that can be used in practice in specific business use cases, such as new business development, application exploration, and technology development Stockmark was founded in April of 2016 by four engineers, including…

Image credit: Stockmark

Tokyo-based Stockmark, the Japanese startup developing and offering sentence analysis AI solutions for businesses, launched a proprietary large language model (LLM) with 13 billion parameters called Stockmark-13b on Friday. This is the largest scale of any single Japanese language LLM and has been developed with assistance by the AWS LLM Development Support Program. Leveraging disclosed company information and patent updates the company has been collecting, the model is able to return more accurate answers to business questions compared other LLMs by suppressing so-called hallucinations. In addition, the new model can generate text about four times faster than ChatGPT.

In August, Stockmark also introduced gpt-neox-japanese-1.4b, a Japanese LLM with 1.4 billion parameters based on the GPT-NeoX LLM learning library. Subsequently, the company was qualified by Amazon Web Services Japan for its LLM Development Support Program in September where they have been developing an LLM that can answer questions on business with higher accuracy and speed using the cloud platform’s proprietary AI accelerator Trainium. The company intends to build LLM that can be used in practice in specific business use cases, such as new business development, application exploration, and technology development

Stockmark was founded in April of 2016 by four engineers, including CEO Tatsu Hayashi, who had worked for a major Japanese trading company. Having developed various services by recommending and structuring disclosed news updates from websites, the company is currently offering a news clipping service for businesses called Anews as well as a tool visualizing market trends and competitors’ movements through structured analysis of business news updates called Astrategy. The company claims that about 25% of the companies nominated for the Nikkei 225 index use any of Stockmark’s products.

via PR Times

Japan’s AAIC announces second close of Africa-focused second healthcare fund

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Updated on Nov.1 at 11am: Correction Line section was removed. AAIC Investment announced on Thursday that the amount raised by the Africa Innovation & Healthcare Fund (AHF) II, which was announced its first close in April, has reached $40 million US at its 2nd close phase. The company has set the final fund size at US$150 million and expects to continue raising funds in the future. Combined with AHF I ($47 million), which was launched in 2017, the firm’s AUM (assets under management) has reached $87 million so far. AHF II has apparently been funded by Asahi Intec (TSE: 7747), Eisai (TSE: 4523), Ohara Pharmaceutical Industry, Marubeni (TSE: 8002), Development Bank of Japan, QR Investment by Hokkoku Financial Holdings Group (TSE: 7381), and TOPPAN Holdings (TSE: 7911) and among others. Of these, Marubeni follows their previous investment in AHF I. AHF I has competed its mission by investing in 30 companies while AHF II has so far invested in 15 companies including Aumet (pharmaceutical B2B marketplace connecting pharmacies and suppliers in Jordan, Egypt, Turkey, and Saudi Arabia), The Baobab Network (startup accelerator based in Nairobi, Kenya), CredAble (digital banking service for sub-Saharan Africa), and Yodawy (pharmacy benefit management service in…

Image credit: AAIC

Updated on Nov.1 at 11am: Correction Line section was removed.

AAIC Investment announced on Thursday that the amount raised by the Africa Innovation & Healthcare Fund (AHF) II, which was announced its first close in April, has reached $40 million US at its 2nd close phase. The company has set the final fund size at US$150 million and expects to continue raising funds in the future. Combined with AHF I ($47 million), which was launched in 2017, the firm’s AUM (assets under management) has reached $87 million so far.

AHF II has apparently been funded by Asahi Intec (TSE: 7747), Eisai (TSE: 4523), Ohara Pharmaceutical Industry, Marubeni (TSE: 8002), Development Bank of Japan, QR Investment by Hokkoku Financial Holdings Group (TSE: 7381), and TOPPAN Holdings (TSE: 7911) and among others. Of these, Marubeni follows their previous investment in AHF I.

AHF I has competed its mission by investing in 30 companies while AHF II has so far invested in 15 companies including Aumet (pharmaceutical B2B marketplace connecting pharmacies and suppliers in Jordan, Egypt, Turkey, and Saudi Arabia), The Baobab Network (startup accelerator based in Nairobi, Kenya), CredAble (digital banking service for sub-Saharan Africa), and Yodawy (pharmacy benefit management service in Egypt).

Porfolio of AHF I
Image credit: AAIC

via PR Times

xGoogler founders-led startup Tonari launches new model of life-size video conferencing system

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Tokyo-based Tonari, the Japanese startup developing and offering a next-gen communication service that connects remote locations under the same name, introduced on Wednesday a new product called ‘tonari lite’, along with the ‘tonari pro’ existing model. The lite version is also available on a subscription-based rental basis. Their products have been installed in many organizations and facilities over the past three years, but the company felt it needed to reduce costs and simplify installation for further expansion. The company improved the manufacturing process and redesigned the product to achieve versatile size and price optimization. This simplified the installation process and made it easier to fit into international deployments and smaller teams. The lite version maintains the functionality of the previous model while saving space, and is optimized for small-group communication, making it easy to use in small offices, medical facilities, educational institutions, and other locations where space is limited. In addition, the revised design significantly reduces installation work. The company expects the lite version to contribute to reducing the frequency of overseas business trips while maintaining smooth cross-border communication. Tonari was founded in 2018 by Taj Campbell, a former product manager at Google, and Ryo Kawaguchi, a former engineer at…

Image credit: Tonari

Tokyo-based Tonari, the Japanese startup developing and offering a next-gen communication service that connects remote locations under the same name, introduced on Wednesday a new product called ‘tonari lite’, along with the ‘tonari pro’ existing model. The lite version is also available on a subscription-based rental basis.

Their products have been installed in many organizations and facilities over the past three years, but the company felt it needed to reduce costs and simplify installation for further expansion. The company improved the manufacturing process and redesigned the product to achieve versatile size and price optimization. This simplified the installation process and made it easier to fit into international deployments and smaller teams.

The lite version maintains the functionality of the previous model while saving space, and is optimized for small-group communication, making it easy to use in small offices, medical facilities, educational institutions, and other locations where space is limited. In addition, the revised design significantly reduces installation work. The company expects the lite version to contribute to reducing the frequency of overseas business trips while maintaining smooth cross-border communication.

Tonari was founded in 2018 by Taj Campbell, a former product manager at Google, and Ryo Kawaguchi, a former engineer at Google (the product name was Continuum while the company name was WorkAnywhere at that time). The company has developed a life-size video system that seamlessly connects two remote locations, creating a smooth and realistic space with a natural eye contact mechanism, clear audio, and low latency.

The company secured 340 million yen (about $3.2 million US in the exchange rate at the timing) in a seed round (led by One Capital, with participation from Mistletoe Japan, Leave a Nest Capital, ABBALab, and several angel investors) in November of 2020, and subsequently 450 million yen (about $3.3 million US in the exchange rate at the timing) in a pre-series A round (from Real Tech Fund and One Capital) in June of 2022.

via PR Times

Japan’s Hakki secures $10M+ funding to empower Kenyan cab drivers with own vehicles

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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…

The Hakki Africa team
Image credit: Hakki Africa

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.

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via PR Times

‘Dots for’ secures $670K to help Africa’s unconnected population benefit from digital economy

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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.

via PR Times

Japan, Europe-focused VC Nextblue launches $33.6M 2nd fund for women’s wellbeing

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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.

Japan’s MUFG launches $135M 3rd fund to work with more GenAI startups

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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.

Josys SaaS and device management platform secures $91M+ in series B for global expansion

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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.