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Finance

US venture fund 500 Startups on watch for Japanese unicorns

Silicon Valley group seeks 60 businesses for investment, mentoring

James Riney, second from left, heads the 500 Startups Japan fund.

TOKYO -- Venture capital fund 500 Startups hopes to unearth some unicorns in Japan after receiving a $10 million investment from the Cool Japan Fund, the Silicon Valley-based company said Thursday.

The company debuted its Japan-based fund in February 2016, investing in 21 businesses to date. The fund has raised $35 million, topping its goal by about $5 million, and will increase investment by backing about 60 Japanese businesses over the next two to three years.

The partnership with the public-private Cool Japan Fund will help 500 Startups support the growth of young businesses. James Riney, head of 500 Startups in Japan, told reporters of the increase in businesses started by talented individuals, including graduates from the University of Tokyo and Kyoto University.

The Silicon Valley fund will continue to invest in just-founded and early-stage enterprises, with Cool Japan providing additional capital once those companies are ready to expand further.

The early-stage venture fund backs businesses from any industry, and has invested in 1,800 companies in 60 countries. It has even helped develop some unicorns, startups valued at over $1 billion, such as U.S.-based cloud communication platform Twilio and Singaporean ride-hailing app Grab.

Beyond money, 500 Startups also provides management support through its mentor network of over 300 entrepreneurs as well as the firm's worldwide connections. These Silicon Valley management techniques will be brought to Japan.

For example, the fund in 2012 invested a few million yen (1 million yen equals $90,000) in Tokyo Otaku Mode, a website that sells anime, manga and other Japanese pop culture products outside of Japan. Using 500 Startups mentors, Tokyo Otaku Mode learned better website development techniques and expanded its sales network to over 130 countries.

Power wheelchair maker Whill is a Japanese venture that has been expanding domestically and in the U.S. thanks to 500 Startups' support. Whill, which released its first model in 2014, has sold about 1,000 wheelchairs to elderly patients in both countries.

Japan has only a few unicorns such as Mercari, an app-based online marketplace. The city of Kobe, which is fostering its entrepreneurs, began cooperation last year with 500 Startups. As 500 Startups partners increase, more unicorns may pop up across Japan.

(Nikkei)

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