JIC makes LP investment in MPI-3 Investment Limited Partnership

・  Supporting innovative medical devicedevelopment startups from Japan

・   Strengtheningthe international competitiveness of Japan's medical device industry

・   Developinga domestic medical device ecosystem

Tokyo, April 19, 2024 – Japan Investment Corporation (“JIC”)has announced its decision to make an LP investment of JPY3 billion in MPI-3Investment Limited Partnership (“MPI-3”), which is managed by MedVentureCapital Management, Inc. (“MedVenture”), a venture capital firm specializing inmedical devices.

JIC aims to stimulate a virtuous cycle ofrisk capital to support next-generation industries in Japan. To achieve thisvision, JIC promotes open innovation as a means for supporting growth and enhancingthe international competitiveness of businesses. JIC approaches these challenges bystimulating private sector investments in open innovation together with JIC’sown investment, while fostering investment professionals.

To achieve itsmission, JIC invests in policy-relevant strategic business areas through LPinvestments in funds under JIC’s umbrella and in private funds.

About LP investment in MPI-3

(1) JIC investment criteria

JIC’s investment criteria* identifies “Driving the creation of newbusinesses for Society 5.0” as one of its focus areas. The social implementation of Fourth Industrial Revolutiontechnologies—such as AI, IoT and robotics, as well as biotechnology, drugdiscovery, healthcare, mobility, space, materials, electronic devices and other areas that mightbecome internationally competitive—need a long-term and large-scale supply ofrisk capital.

*https://www.j-ic.co.jp/en/investment/criteria/

(2) Current status of investment market

To creatediscontinuous innovation for the realization of Society 5.0, it is criticallyimportant to support startups in life science fields such as biotechnology, drug discovery, and medical devices, which require a long-term and large-scalesupply of risk capital from the research and development stage through to marketlaunch. The global medical device market is expected toexpand, and the Unites States, which leads this sector, benefits from anestablished ecosystem for nurturing startups. Under the US circular businessmodel, startups are responsible for medical device development and clinicaltrials, and when valid clinical data is obtained, the business is sold to amedical device-related company, and the exiting entrepreneurs either set upanother business or invest in and support startups in the same field. In Japan,on the other hand, the number of startups focusing on medical devicedevelopment is extremely small, open innovation in this field is not sufficientlywidespread, and private capital for investment in startups developing medicaldevices continues to be inadequate. As a result, although promising new ideas capableof addressing clinical needs do exist in Japan, they have not beencommercialized, impacting the competitiveness of Japan’s medical deviceindustry.

(3) About MPI-3

MedVenture’s mission is to createJapan-based startups developing cutting-edge medical devices for use in Japanand overseas, with the aim of building a medical device ecosystem in Japansimilar to that in the US, especially in Silicon Valley. MedVenture plans toincubate based on the needs of the medical field and then exit through M&Ato medical device-related companies. In addition, MedVenture seeks tocontribute to the development of the medical device ecosystem in Japan bypromoting open innovation through activities such as providing domestic medicaldevice-related companies with M&A opportunities related to overseasstartups, keeping them informed about the latest industry trends, and engagingin educational and awareness-raising activities that include producing humanresources for medical device-related industries and fostering the entreprenuealmindset of domestic medical device-related companies.

Through the LP investment in MPI-3, JICexpects to expand the supply of risk capital to the  medical device sector, where private investmentcapital is inadequate, and to accelerate the creation of Japanese startupsdeveloping innovative medical devices. In addition, JIC anticipates thatM&A and business alliances among MPI-3 portfolio startups will lead to thedevelopment of Japan's medical device ecosystem and strengthen theinternational competitiveness of the Japanese medical device industry. Finally,by supporting governance and system development, JIC hopes to promote the sustainablegrowth of MedVenture, a rare VC specializing in medical device investment, leadingto further development of the medical device ecosystem in Japan.

Overview of MPI-3

Name:                              MPI-3Investment Limited Partnership

Established:                     2024

Duration:                          10years (with a possible extension of 2 years)

GP:                                   MedVenture3Limited Liability Partnership

Overview of management company

Name:                              MedVentureCapital Management, Inc.

Established:                     2023

Address:                          Chuo-ku,Tokyo

Representative:  　 　 　Hajime Oshita

(For reference)

JIC’s fund investment strategy

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(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 the developmentof 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.