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Japanese investment fund seeks know-how from US startups

TOKYO -- A dozen or so Japanese companies in various business sectors will set up an investment fund to lure U.S. financial technology startups to Japan, hoping to develop new services via partnerships.

     U.S. venture capital company Sozo Ventures will create the fund as early as this fiscal year, taking in a total of around 20 billion yen ($176 million) from the Bank of Tokyo-Mitsubishi UFJ, Yamato Holdings and others. The fund will invest in promising U.S. startups active in the Silicon Valley and elsewhere that are considering expansion into Japan.

     In each business sector, one major Japanese company will be designated a strategic partner in exchange for its funding contribution. Sumitomo Mitsui Card will represent credit cards, while Sompo Japan Nipponkoa is considering doing the same for insurance. Participation will be solicited from real estate, advertising and other companies. Yamato sees the fund as an opportunity to partner with U.S. tech companies.

     In recent years, financial services have been increasingly integrated into the operations of nonfinancial companies to enhance customer convenience. For instance, Chinese e-commerce giant Alibaba Group now offers its own transaction settlement services. Japanese companies are eager to tap advanced expertise from abroad to broaden their services.

     Increased cross-industry collaboration may accelerate development of settlement systems linked to the movement of physical goods as well as increase the use of big-data analysis, with potential applications such as auto insurance premiums that vary by the driver's skill.


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