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Sony to set up fund to buy into startups with promising tech

Daiwa Securities Group to help round up capital with promise of big IPO paydays

It is rare for a Japanese manufacturer to set up an investment fund, but Sony is breaking the mold in its search for companies involved in robotics, artificial intelligence, fintech and other sectors.   © Reuters

TOKYO -- Sony has joined hands with Daiwa Securities Group to launch a venture capital fund of over 20 billion yen ($184.7 million) that will help the consumer electronics company tap into promising technology being developed by startups.

The fund will allow Sony to invest in more emerging companies and take larger stakes than it would be able to afford on its own.

Investment targets will include mainly information technology startups in Japan and abroad.

The fund will be established through a joint venture between Sony and Daiwa.

It is rare for Japanese manufacturers to set up investment funds.

Sony envisions investment periods of about a decade. It expects to buy stakes of several hundred million yen to several billion yen in companies involved in robotics, artificial intelligence, fintech and other sectors. Overseas investment targets will be selected by Sony's international operations.

Sony will screen investment targets for their technological promise. Daiwa will provide IPO underwriting and other financial services.

The companies aim to seek capital from financial institutions that are having difficulty in Japan's current low interest rate environment. Sumitomo Mitsui Banking and Mitsubishi UFJ Lease & Finance are already on board to contribute to the fund. These institutions expect to recoup their investment when a target company lists on a stock exchange.

Since 2016, Sony has used its own capital to invest in over 40 companies, mainly early-stage startups.

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