Tokyo-based Movida Japan publicized its new regime on Wednesday. While CEO Taizo Son will remain in his current position, their “chief accelerator” Kengo Ito is leaving the initiative and will become more focused on managing their spun-off investment fund called Genuine Startups as a general partner. Instead of Ito, Hideyuki Shimane will be named to head the acceleration program.
Coinciding with this reorganization, Movida Japan changed its participation criteria for startups in their acceleration program, the participants not necessarily being required to be a Movida investment vessel, while the period for every batch of the program was cut by two months, from six months to four. They will announce the acceptance for applications for a new batch when it becomes available.
Separating incubation and investments
Movida Japan has been providing its incubation program and seed investments. They initially used their own funds for these investments, but this role was transferred to their spun-off fund Genuine Startups back in 2013. They intended to make an explicit separation of the two functions with this, but the problem was Ito was forced to administer both of them. They explained about what happened to them over the past year:
Aiming to incubate more high-profile startups, we established a shared office space called Startup Dojo in Shibuya last year. As a result, it led to more high-profile startups. But as our portfolio exceeded over around 50 companies, it turned out we unable to spend time enough to follow up on their business developments or help them seek their next round funding opportunities.
Movida Japan decided to appoint Shimane as head to address this issue. He had been substantially committed to creating the content of the incubation program since launch. Shimane explained about what they aim to do with the reorganization at this time:
We aim to eliminate possible misunderstanding from people that startups graduating from our program are solely after fundraising through our investment scheme. That’s why we’ll enhance co-investments in them with other seed investors.
As one of its good examples, our readers may recall Japanese gaming startups Translimit, one of Movida Japan’s portfolio companies, recently raising about $100,000 from Genuine Startups and Skyland Ventures.
Pivoting business model
Typical seed accelerators scrape up their operating cost from management fees from their funds or capital gains. But with the reorganization at this time, Movida Japan will lose its existing income source and need to find another revenue stream. Shimane told us how they will solve this problem:
We’ll make money by helping established companies build and run their in-house incubation initiatives, which is similar to what US-based startup incubator TechStars is providing to major companies. We established such a program with Yahoo Japan back in July, and I think they will soon announce the results made over the past year.
We understand they are receiving requests to help run similar projects at other companies. Regarding their weekly lecture session inviting outstanding entrepreneurs as guest speakers, it has been provided on an invitation-only basis but will be opened up to anyone. For audience convenience, the session will be rescheduled to 7pm on Wednesdays, because many Japanese companies encourage employees not to overtime work every Wednesday; more aspiring entrepreneurs may be expected to attend.