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.

Tokyo-based VC firm Nextblue announced on Thursday that its first fund targeting to raise up to 3 billion yen ($27.5 million), which was initially set up in April, has reached its first close with completing securing about half of the final target. Disclosed limited partners include Japanese department store chain Marui Group (TSE: 8252), Japanese system integrator Q’sfix, and Japanese social gifting and e-voucher rewards platform Giftee (TSE:4449).

The fund’s investment areas are Future of Work, Future of Health, and Future of Lifestyle. It intends to invest in seed stage startups in Japan as well as those in the pre-series A stage in Europe which have completed the product market fit phase and is ready for expanding into the Japanese market.

The fund was founded by Yuichi Kori, Kanako Inoue, and Vincent Tan. Followed by launching his own startup Otsumu, Kori has been running his own VC called Reality Accelerator. Both Inoue and Tan have worked at Boston Consulting Group and Tokyo-based VC firm D4V. Nextblue’s goal is to support Japanese startups as well as European startups which usually face similar social issues to the Japanese society in their home turf. For helping these European startups expand into Japan, the fund expects to establish a joint venture with them and provide hands-on support with local partners.

See also:

• IDEO, Genuine Startups join forces to invest in early-stage startups in Japan

In an interview with Bridge, Inoue told us why her team picked up the two markets to invest in:

The investment market in Europe is still conservative, still giving early-stage and seed companies a limited access to risk money. We also chose the market because it is easier to secure a certain equity stake (compared to the US where valuations are extremely high).

Bring promising European startups to Japan and help them expand into the market is also our mission. We will pour a certain amount of money into them in return for receiving a certain portion of their equity, but we want to commit to them, create a joint venture, and make their business in Japan a success in partnership with our local partners.

Kori had been investing in startups through his own Reality Accelerator, and this activity will be apparently integrated into Nextblue. Kori and Inoue mainly invest in Japanese startups from Tokyo, while Tan is currently based in Berlin to watch the European startup landscape.

As of the announcement, the firm unveiled a portfolio of 14 investees from the first fund so far. Among them, two companies – AZOO and Early Music Company Japan – graduated from the fund’s accelerator program conducted in Tokyo last summer.

From Japan:

• AZOO …… Provides Wasimil, an operation automation service for small and medium-sized hotels
• Early Music Company Japan …… Provides Smart Accompanist, a platform for selling ”minus-one” sound tracks of classical music
• Indigames …… Develops and provides casual games and high-quality game development engines
• Kalkul …… Develops and provides Aura, a vertical AR (augmented reality) audio content platform
• Matsuri Technologies …… Provides SaaS and platforms for short-term rental residences
• SecureNavi …… Provides ISMS (Information Security Management System) automation tools
• Precal …… Provides an automated prescription data-entry service for pharmacies

From Europe:

• Ohne (UK) …… Provides organic sanitary product subscription service and PMS (premenstrual syndrome) relief products
• Xapix (Germany) …… Provides a platform that automatically integrates data and organizes data suitable for AI use
• FounderNest (Spain) …… Provides an AI-powered platform for matching startups and investors
• BreakthroughX Health (Germany) …… Provides an app for patients suffering from multiple sclerosis
• Lana Labs (Germany) …… Develops and provides AI-based process mining tools
• Artivive (Austria) …… Provides AR art creation tools

Nextblue seems to be looking to bring Japanese startups to Europe too. The firm says it is happy to provide support to startups that already have overseas offices or branches.

Inoue added,

There are more and more funds for seed stage startups, but not many of them provide hands-on support yet. Kori has a background in engineering, and the three partners of us, including Vincent and I, are strong in helping teams in the phase creating from the scratch. We would like to actively support startups that can find our value there.