JIC makes LP investment in Abies Ventures Fund II Investment Limited Partnership

・   Drivingthe creation of new businesses in the Deep Tech field for Society 5.0

・   Supportingthe global expansion of domestic startups to create unicorn startups

・   Expandingfundraising from institutional investors

Tokyo, August 22, 2024 – Japan Investment Corporation (“JIC”)has announced its decision to make an LP investment of JPY1.5 billion in Abies Ventures Fund II Investment Limited Partnership (“AVF II”), which is managed by AbiesVentures, Inc. (“Abies”), a venture capital firm that invests in deep-techstartups.

JIC aims to stimulate a virtuous cycle of risk capital to supportnext-generation industries in Japan. To achieve this vision, JIC promotes openinnovation as a means for supporting growth and enhancing the internationalcompetitiveness of businesses. JIC approaches these challenges by stimulatingprivate sector investments in open innovation together with JIC’s owninvestment, 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 AVF II

(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 investment focus areas. Specifically, JIC believesthat it isnecessary to provide long-term, large-scale risk capital for social implementationof technologies related to the Fourth Industrial Revolution, such as AI, IoT,and robotics, as well as business fields that can be globally competitive, suchas biotechnology, drug discovery, healthcare, mobility, space, materials, andelectronic devices, as well as for the creation of unicorns—definedas privately held companies with an enterprise value of USD1 billion ormore—that can grow their business sustainably with competitive global economicstrength.  

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

(2) Current status of investment market

To realize Society 5.0, it is criticallyimportant to support startups working on deep tech, a technology that has thepotential to have a significant impact on solving social issues by leveragingdiscontinuous innovation based on physical technology that also makes use ofdigital technology and which requires a long-term and large-scale supply ofcapital from the research and development stage through to market launch. Due to the declining birthrate and aging population,the size of the Japanese domestic market is shrinking relative to the globalmarket, and while expanding into the global market is important for manystartups, they are required to deal with a variety of challenges including differentregulations, business practices, cultures and languages in each country orregion, and it is desirable to receive support from a VC with a wealth of knowledge.

(3) About AVF II

Abies has accumulated expertise andknow-how by identifying investment sectors in the four deep tech areas of 1) robotics/mobility,2) advanced information processing/communication technology, 3) newmaterials/environmental technology, and 4) space. Abies plans to focus on deeptech investments in the same areas for AVF II. Through the investment in AVFII, JIC expects to contribute to the creation of new businesses and newindustries for Society 5.0 by expanding the supply of risk capital in the deeptech sector where private capital is inadequate, and accelerating theimplementation of deep tech in society.

Abies’ strength lies in its ability tosupport the overseas business development of its investees and theirfundraising from overseas investors by leveraging its global network of keymembers. JIC expects that its LP investment in AVF II will promote the globalexpansion of domestic deep-tech startups to create unicorn startups.

JIC also expects to expand fundraisingfrom institutional investors and stimulate inflow of medium- to long-term riskcapital for the deep tech sector by providing funding and management supportfor the fund managed by Abies which has competitive knowledge and a robustnetwork in the deep tech field.

Overview of AVF II

Name:                    Abies Ventures Fund II Investment Limited Partnership

Established: 　      2024

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

GP:                         Abies Ventures GP II LLP

Overview of Abies

Name:            　    Abies Ventures, Inc.

Established:      　2017

Address:     　      Tokyo

Representative:   Fuyuki Yamaguchi　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　

(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 "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.