・Offering riskcapital for startups in the seed stage to create unicorns
・Promoting thecreation of new businesses in deep tech for Society 5.0
・Promoting riskcapital procurement from institutional investors
Tokyo, February 24, 2023 – Japan Investment Corporation (“JIC”)has announced its decision to make an LP investment of JPY3 billion in ArchetypeVentures III Investment Limited Partnership (“ATV3”) managed by Archetype Ventures LLC (“ATV”), which supportsstartups in the seed stage.
JIC aims to stimulate a virtuous cycle of risk capital to supportnext-generation industries in Japan. To achieve this vision, JIC promotes open innovation as a means forsupporting growth and enhancing the international competitiveness of businesses. JICapproaches these challenges by stimulating private sector investments in openinnovation together with JIC’s own investment, while fostering investmentprofessionals.
To achieve its mission, JIC invests in policy-relevant strategic businessareas through LP investments in funds under JIC’s umbrella and in privatefunds.
About LP investment in ATV3
(1) JICinvestment criteria
JIC’s investment criteria* identifies“Creating unicorn startups” and “Driving the creation of new businesses forSociety 5.0” as two of its focus areas. JIC provides support to create unicorns,which seek to grow competitively and sustainably in the global economy,and to business sectors involved in the creation of new businessescharacterized by discontinuous growth with high uncertainty from a businessperspective and which require a long-term, large-scale supply of risk capital.
*https://www.j-ic.co.jp/en/investment/criteria/
(2) Current status of investment market
In recent years, thesupply of risk capital to pre-seed/seed stage startups in the domestic markethas been limited. To accelerate the creation of unicorns from Japan, it isimportant both to actively support entrepreneurs who are trying to create newbusinesses and to increase the number of promising startups that have thepotential to grow into unicorns in the future. From the perspective of creatingdiscontinuous innovation for the realization of Society 5.0, support forstartups working on deep tech will be extremely important. Issues to beovercome include the need for a long-term, large-scale supply of risk capital,inadequacies in research and development related to the creation of discontinuousinnovation, and insufficient collaboration on R&D between startups and externalorganizations/institutions.
(3) About ATV3
ATV provides support to seed-stage startups, mainly in the B2B area, thathave products but have not yet reached the commercialization stage. During the “valleyof death” phase between development and commercialization, ATV providesthorough hands-on support and builds trusting relationships with entrepreneurswhile accompanying them through the business development process. ATV3 also intendsto make seed stage investments.
Deep tech startups account for more than 10% of the total portfolio ofATV's first and second funds, and ATV3 intends to invest about 10% of itsportfolio in deep tech startups.
JIC expects that the LP investment in ATV3 will lead to stronger investmentactivities in seed-stage startups in ATV, and will underpin the startupecosystem in Japan. JIC also expects that ATV will promote investment in thedeep tech area and accelerate social implementation of deep tech, therebycontributing to the creation of new businesses and new industries for Society5.0.
JIC will also support ATV in developing its ability to respond to the needsof institutional investors to increase the supply of risk capital raised from theseinvestors.
Overview of ATV3
Name: ArchetypeVentures III Investment Limited Partnership
Established: 2022
Duration: 10years (with a possible extension of 2 years)
GP: Archetype Ventures III LLP
Overview of management company
Name: Archetype Ventures LLC
Established: 2022
(Its predecessor, Archetype Ventures Inc. was established in2013)
Address: Minato-ku,Tokyo
Representative: Shumpei Fukui, JunNakajima
(For reference)
JIC’s fund investment strategy
(For reference)
Objectives of JIC’s LPinvestments
1. Stimulate the supply of risk capital to helpcompanies grow and to enhance their competitiveness
JIC intends to provide capital to areas that areessential from the perspective of strengthening industrial competitiveness butlack private investment capital (investment strategies, sectors, stages,regions, etc.) with the aim of stimulating private investment capital in theshort term and medium-long term.
2. Create diverse investment teams, professionals, andstrategies to support a virtuous cycle of risk capital
1) Investmentteams
JIC promotes growth of the investee fundsas a leader in the intermediary of risk capital provided by institutionalinvestors (pension funds, foreign investors, etc.) towards the establishment offuture funds. This will be achieved by expanding experience and track recordsamong its fund investment team (management company) and by further improvingits ability to respond to institutional investors.
2) Investmentprofessionals
With the cooperation of industryorganizations such as JVCA, institutional investors, and investee managers, JICsupports the research and introduction of best practices of managers and thedevelopment of human resources serving as investment professionals.
3) Investmentstrategy
JIC will add diversity and depth to themarket by making an LP investment in funds even for those with strategies thatare not common in Japan yet, in response to their fund raising, including atthe time of its establishment.
About Japan Investment Corporation (JIC)
Japan InvestmentCorporation (“JIC”) was established on September 25, 2018 under the IndustrialCompetitiveness Enhancement Act. JIC’s investment focus areas are driving thecreation of new businesses for Society 5.0, creating "unicorn startups",leveraging promising untapped regional technologies and promoting businessconsolidation across industries and organizations. JIC provides risk capital tothese areas through funds independently established by JIC and LP investment inprivate funds to promote open innovation and contribute to strengthening thecompetitiveness of Japanese industries and expanding the investment ecosystem.
Press Contacts
Japan Investment Corporation
Corporate Planning, Communications Group:
Tokyo Toranomon Global Square 9F,
1-3-1 Toranomon, Minato-ku, Tokyo 105-0001
