SBI Holdings, a leading Japanese financial firm, has announced its intention to launch a ¥100 billion ($660 million) fund dedicated to startups specializing in web3, artificial intelligence (AI), and the metaverse.
This fund, set to launch within 2023, is a rare instance of large-scale venture capital in Japan, a country known for its mature crypto regulations.
The fund is expected to invest several hundred million to several billion yen per company, with a total of 150 to 200 companies projected to receive investment.
Notably, this initiative has already secured over ¥50 billion in commitments from major financial institutions, including Sumitomo Mitsui Banking Corporation, Mizuho Bank, Nippon Life Insurance Company, and Daiwa Securities Group.
The creation of this fund aligns with the Japanese government’s recent efforts to foster startup growth. In November 2022, the Kishida administration established a “Five-Year Plan for Startup Development.” This plan aims to increase the current ¥800 billion investment in startups to around ¥10 trillion by 2027.
In an interview from June 2023, Mizuho executive Kazutoshi Isogai boasted about the success of many of its funded startups:
“Startup business has been our forte.”
The government’s ambitious goal is to create 100 unicorns and 100,000 startups, making Japan the largest startup hub in Asia and among the leading startup clusters globally.
Tailoring Crypto Regulations to Benefit the Tech Industry
In addition to financial support, the Japanese government is also working to create a conducive environment for these emerging sectors. One significant change is the decision to allow startups to issue crypto tokens instead of stocks when seeking public funding.
This move aims to diversify income streams for new businesses and further advance the country’s mature crypto regulations.
The new form of equity financing is subject to the Limited Partnership Act for Investment. This act sets conditions under which limited liability partners can sell shares to unlimited liability partners.
All in all, SBI Holdings’ fund and the government’s supportive policies signal a significant shift in Japan’s tech startup sector. The country is nurturing its domestic startups and positioning itself as a global leader in the web3, AI, and metaverse.
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