if I get it I am lucky, but if not, it is fate.
Japanese investors are starting to “deposit” money to Indian companies.
DataLabs reports that from 2014 to the first half of 2019, Indian startups have raised more than $ 51 billion from Japanese investors.
For Japanese investors, investing funds in a promising overseas company is a win-win opportunity, because Japan implements a negative interest rate policy and keeps money in banks without making counter-claims.
There are very few start-up projects worth taking in Japan. During the same period, Japanese investors invested only $ 12 billion in local startups. The country’s domestic market is maturing and lacks growth and innovation. The startup ecosystem has been stagnating for a long time, and young people are more inclined to work in large companies that offer high salaries than promising startups.
And six years ago, there were still Indian companies that were quite surprised by Japanese venture capital.
At that time, Teruhide Sato, founder of Tokyo-based venture capital company Beenos, met with Satyen Kothari, co-founder of payment company Citrus Pay in Mumbai, and offered him an investment intention, which made Kothari feel a little flattered, but he politely rejected it. Sato, because their offer is too low.
Kothari recalls: “Sato then did something very ‘Japanese’, and he started listening to me silently. Later, he spent a lot of energy behind the scenes and helped us find another home with Japanese companies with investment intentions. “
In December 2013, Citrus became one of the first Indian startups to receive investment from a number of Japanese venture capital companies, including Beenos and Digital Garage. Japanese venture capital invested a total of approximately $ 5.5 million. When Kothari founded the wealth management company Cube Wealth in 2017, he was supported by another venture funded by Sato and the Japanese investment company Asuka Holdings.
The market still has a place to stay
Amit Gupta, co-founder of Bangalore bike-sharing startup Yulu, told KrASIA: “Japanese venture capital companies need to find channels to allocate capital and get good returns. The United States, China, and India are several of the larger markets. But the outstanding start-ups in these two markets (U.S. and China) are fiercely competitive, and the Indian startup ecosystem is still growing. “In 2018, Yulu won the Japanese round game company Akatsuki Entertainment Technology in the seed round, including many $ 7 million for investment agenciesYuan financing.
At the G20 summit in Osaka in early June this year, Indian Prime Minister Modi and Japanese Prime Minister Shinzo Abe met. The two countries reached a cooperation and will launch a $ 187 million FOF fund for Indian technology startups. Among them, 80% of the funds came from the major LPs of Mizuho Bank of Japan, Japan Investment Policy Bank, Japan Life Insurance Mutual Co., Ltd. and Suzuki Corporation, and the remaining 20% of funds came from India.
Uniil Ventures venture capital managing partner Anil Joshi told KrASIA: “Despite the economic slowdown, India’s industries offer huge opportunities. Given the good relations between Japan and India, they have reason to go to India to explore investment opportunities. “This year, Unicorn Ventures also participated in a $ 5 million Series A round of financing from Indian digital banking platform Open. Other investors include Japan’s Beenext and Recruit Strategic Partner.
In general, Japanese investment companies can be divided into two categories. One type is venture capital companies such as Beenext, Incubate Fund and Rebright Partners, which are mainly involved in seed and Series A investments in segmented markets; the other type is investment by Mitsubishi Motors, Mitsui & Co., Sumitomo Corporation, Toyota Motor, and others Sector, they typically make a Series B or Series C strategic investment in a small number of industries.
GP Brij Bhasin of Rebright Partners in Japan pointed out to KrASIA: “Japanese venture capital companies are trying to find new models in various industries in India.”
Beenext has invested in about 20 Indian startups, and the Incubate India Fund has invested in about 10 companies. Rebright Partner has invested in at least 12 early-stage startups in a variety of fields including deep technology, analytics, health technology, mobility, e-commerce and more.
Bhasin said: “Many companies will use their accumulation to make strategic investments in areas that fit their long-term goals. These areas are either highly matched to the company’s existing products or areas where the company intends to launch new business.” p>
For example, the Akatsuki Entertainment Technology Fund, established by Tokyo mobile gaming company Akatsuki, invests in and participates in “all companies that provide emotional experiences.” The fund has invested in at least 10 Indian companies, including gaming platforms SuperGaming and MechMocha, superhero startups PlanetSuperheroes,And Doubtnut, an online education platform. Japanese car giant Toyota has invested in used car trading platform Droom and bus service company Shuttle. Japan’s largest life insurance company, Japan Life Insurance Mutual Co., has invested in money lending company Moneyview and wealth management platform Scripbox.
According to Bhasin, venture capital companies typically invest between $ 100,000 and $ 3 million, while large companies typically invest between $ 3 and $ 5 million.
Slow down and stabilize again
Although Japanese companies have been deployed in Southeast Asian countries such as Singapore, Thailand, Indonesia, and the Philippines, the only market comparable to China is India, but there is still a 5-7 year gap between India and China.
In the past two years, Sino-Japanese venture capital has launched a fierce competition in the Asian market. According to data from research agency Venture Intelligence, from January to September this year, Chinese venture capital invested more than $ 2.2 billion in Indian startups, while Japanese investors invested a total of $ 1.5 billion in 2019 (to date).
Venture Gurukool founder Mahendra Swarup told KrASIA: “Chinese investors who come to India are the first generation of entrepreneurs. Their investment is based on their entrepreneurial interests and risk-taking capabilities, so their investment philosophy is quite radical.”
“Most Japanese venture capital comes from large local companies. Unlike Chinese investors, they are more conservative and very picky.”
A number of investors and entrepreneurs interviewed by KrASIA have stated that startups favored by Chinese investors have either grown rapidly or their business models have successful experience in China; Japanese investors are committed to establishing long-term partners relationship.
Rebright general partner Bhasin believes that Japanese investors tend to stay away from companies that seek high growth rates and burn money. “A startup must have a good foundation, a valid reason to burn money, and a sustainable growth cycle,” he said.
He also said that Japanese venture capital hopes that startups have good control mechanisms in terms of risk prevention.
Joshi of Unicorn Venture believes that, compared with Chinese investors, Japanese venture capital has a slower decision-making, but it pays more attention to long-term development.
Rajan Bajaj, founder of Slice, a non-bank financial company, said: “Japanese investors first seek trust. It may take some time to build a relationship at first, but once they trust you, they will start to fund you.” Established for 3 years, mainly for young peopleCredit services, with four Japanese venture capitalists including Das Capital and M & S Partners.
Chinese investors are mainly optimistic about consumer Internet start-ups, because such companies have the successful experience of quickly becoming bigger and stronger. In contrast, Japan, given its influence in the global capital market and its strong capabilities in the manufacturing and automotive sectors, the Japanese are more inclined to invest in financial technology and mobility startups, but they are in health technology, e-commerce, logistics And gaming are also involved in technology.
Cube Wealth founder Kothari explained: “The consumer cycle in Japan has matured very early, so they do not have the experience and background of Chinese investors. They are better at asset management, lending, payments and mobility.” < / p>
Ninjakart, BulkMRO and other e-commerce platforms, logistics technology company Locus, and automated storage company GreyOrange have all received investments from Japanese companies.
Slice founder Bajaj believes that Japanese venture capital not only invests in mature models, they will also actively seek new ideas and invest in the long term. A number of Japanese investment companies have jointly invested in lesser-known start-ups, such as Elanic, an early startup fashion e-commerce platform, Healthians, a health technology company, and Droom, an online used car market.
Bajaj said: “They have built very large companies themselves, they understand the nature of the business, and have their own views on the market prospects in the next 5 to 10 years.”
Edit | 郭 沈 @ 出海
Pictures | Pixels
