PALO ALTO, U.S. -- About a dozen big Japanese companies are to invest a combined 50 billion yen ($457 million) in an incubator to be created by California-based WiL.
Sony, ANA Holdings, Suzuki Motor, Mori Building, Mizuho Financial Group, Nissan Motor, KDDI, Seven & I Holdings and Itochu are among the financiers of what essentially will be one of the largest venture capital funds of mostly Japanese origin.
The startup factory will allow the Japanese companies to buy into a number of young enterprises while diversifying investment risks.
WiL will be in charge of spotting prospects. The startups that are selected to join the incubator will receive funding of anywhere from 100 million yen to 2 billion yen. The incubator will focus on startups based in Japan or the U.S. that specialize in the "internet of things," financial technology, artificial intelligence, robotics or e-commerce.
Since being founded in 2013, WiL has invested in startups and helped to teach large companies how to develop new ideas and create new opportunities. In 2014, it set up its first investment fund, luring around 40 billion yen from more than 10 Japanese companies, including Daiwa Securities Group, the Nippon Telegraph and Telephone group and JVC Kenwood.
While some Japanese businesses have begun setting up their own investment funds and have been supporting startups on their own, simply deciding to take this route remains challenging for many.