JIC makes LP investment in Headline Asia V, L.P.

・   Creatingglobal unicorns from Japan with support from global VC firms

・   Promotingopen innovation between startups in Asia and Japanese companies

・   Promotingthe creation of new businesses toward Society 5.0

Tokyo, May 16, 2024 – Japan Investment Corporation (“JIC”) has announcedits decision to make an LP investment of USD27 million in Headline Asia V, L.P.(“Headline Asia V”), a VC fund managed by global VC firm IVP Advisory Co. (“IVP”).Headline Asia V invests in the Asian region with a focus on Japan. The fund supports startups in Japan byleveraging the global network of the Headline Group, a global VC firm thatoperates fund series in four regions (North America, South America, Europe, andAsia).  

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 for supporting growth and enhancing the international competitiveness of businesses. JICapproachesthese 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 Headline Asia V

(1) JIC investment criteria

JIC’s investment criteria* identifies “Drivingthe creation of new businesses for Society 5.0” and “Creating unicorn startups”as two of its focus areas. Specifically, JIC believes that it is necessary to providelong-term, large-scale risk capital for social implementation oftechnologies related to the Fourth Industrial Revolution, such as AI, IoT, androbotics, as well as business fields that can be globally competitive, such asbiotechnology, drug discovery, healthcare, mobility, space, materials, andelectronic devices, while supporting the creation of unicorn startupswith a competitive edge seeking sustainable growth on a global level.

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

(2) Current status of investment market

Against the backdrop of the declining birthrate and aging population, thesize of the Japanese domestic market is shrinking relative to the globalmarket, and while expanding into the global market is important for manystartups, they will have to deal with a variety of challenges, including differentregulations, business practices, cultures, and languages in each country orregion. For this reason, it is desirable that promising startups seeking togrow into global unicorns receive early stage support from globally active VCs withexperience and knowledge regarding development of products, services, andbusiness models for overseas markets, adoption of capital policies that alignwith global standards, organizational structures, and investment contract termsand conditions, among others.

In the Asian region, there are also areas where digitalization is takingplace at a faster pace than in developed countries due to the absence of matureexisting industries; these include the elimination of inefficientmulti-structured transactions in commercial distribution and supply chainsthrough digital technology, and the emergence of digital platforms centered onmega-ventures. Japanese companies are expected to seize these opportunities, utilizingthe advanced digital technologies and business models of Asian startups in sectorswhere they can be internationally competitive to create new businesses forSociety 5.0. To this end, it is important for Japanese companies to build partnershipswith promising digital startups and promote open innovation.

(3) About Headline Asia V

Headline Asia V is strengthening its global ties with the Headline Group, aglobal VC firm that operates fund series in four regions (North America, SouthAmerica, Europe, and Asia) and is building a platform capable of providingongoing support to startups. JIC anticipates that the LP investment in HeadlineAsia V will provide risk capital to startups in Japan that are looking toexpand overseas from an early stage.

Headline Asia V's strategy is to generate returns by connecting theecosystems of Japan and other countries, and Headline Asia has a track recordof forming business alliances between its overseas portfolio companies andJapanese companies. Through its LP investment in Headline Asia V, JIC plans tomaintain and strengthen open innovation by pursuing business alliances andother partnerships between investee startups in Asia and Japanese companies.

In addition, Headline Asia V has a policy of investing in startups that canresolve social issues and create new industries through the use of innovativetechnology in the areas of Fintech, Entertainment & Media, eCommerce &Logistics, and AI. JIC expects the LP investment in Headline Asia V to providerisk capital for startups in AI and other fields, and to promote the creationof new businesses and new industries toward the realization of Society 5.0.

Overview of Headline Asia V

Name:           　    Headline Asia V,L.P.

Established:        2023

Duration:             10 years (with apossible extension of 2 years)

GP:                       Headline AsiaV (GP), Ltd.

Overview of management company

Name:                  IVP Advisory Co.Ltd.

Established: 　   2008

Address:          　Tokyo, Taipei

Representative:  Akio Tanaka, Joseph Huang

(For reference)

JIC’s fund investment strategy

(For reference)

Objectives of JIC’s LP investments

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 "unicornstartups", leveraging promising untapped regional technologies andpromoting business consolidation across industries and organizations. JICprovides risk capital to these areas through funds independently established byJIC and LP investment in private funds to promote open innovation andcontribute to strengthening the competitiveness of Japanese industries andexpanding the investment ecosystem.