In the news from the forum vol.1, we covered the whole picture of the forum and Opening Remarks by Brazilian venture capital. From vol.2 onwards, we will provide a series of 18 sessions. This time, we would like to share a session of “Japanese Venture Capital” by DG Ventures, Mr. Takayuki Ide!
Mr. Takayuki Ide, DG Ventures
The method of combining traditional closed innovation with open innovation to prepare for disruptive innovation and increase the speed of innovation has become a global trend. Corporate venture capital (CVC) and open innovation are spreading rapidly among Japanese companies. The Future Creation Fund, in which Toyota participated in earnest in November 2015, and the Toyota AI Ventures, which was established in Silicon Valley in July 2017, attracted attention, then Nikkei’s “Q&A with 100 Presidents” (December 2005 survey), just over 30% of companies have already established and are considering CVCs. In addition, the amount of startup investment by large companies’ own funds in the first half of 2006 (January to June) was 40.9M yen, a year-on-year increase of 50.9B yen (33.1B yen in Japan, 17.7B yen overseas), and the number of investments was 8 It is the largest ever with an additional 122 cases (from Forbes article).
As a pioneer in the Japanese corporate venture capital industry, Takayuki Ide, investment manager of DG Ventures, which has been promoting investment strategies, spoke about the company’s investment strategy and prospects for startups.
DG Ventures, as an investment subsidiary of Digital Garage Group (TSE1: 4819), supports entrepreneurs in a wide range of stages, from pre-foundation to IPO. In the early stage (seed stage), they provide risk money through Open Network Lab, which provides Japan’s first seed accelerator program, and in the early middle late stage, through DG Ventures. In the early stages, They provide business hypothesis / validation support, and from the early stage onwards, we will provide data analysis support and recruitment that are essential to corporate growth.
DG Ventures provides risk money to unlisted companies with high growth potential, mainly in the Internet field. They give a flexible form of funding, with no restrictions on period, stage, nationality, etc., by investing in principal with own funds, rather than the form of LP investment, which is usually done by venture capital. Major investment achievements cover a wide range from developed countries to emerging countries such as USA, Japan, India, Singapore, Indonesia, Malaysia, UK, Israel, Poland and Australia. At the same time as the stage of the company, they support the overseas expansion of Japanese companies and the overseas expansion of Japanese companies based on past know-how. Specifically, internal engineers, designers, and analysts support product development and KPI analysis to support not only funding but also business growth (from the company’s website).
DG Ventures’s website
DG Ventures’s portfolio
A total of US$20B has been invested in about 200 startups, covering not only developed countries but also emerging countries. The ratio is 40% in Japan, 40% in the United States, 10% in Asia, and 10% in others. The investment field covers a wide range of fields such as agritech, fintech, real estate tech, manufacturing, design and marketing. Exit results include Cyber Buzz and Lawyer.com.
DG Ventures’s major investment
Cases of invested startups
DG Ventures introduced investment cases in various fields.
IPO: Cyber Buzz, a provider of influencer marketing through social network services, was founded in 2006 and was funded by DG Ventures in 2018. The following year, the company performed an IPO and the valuation is estimated at US $ 140M.
Agritech: They invest in the Agri Info Design, which was also featured in the forum. Agritech is highly regarded for providing high value-added services such as AgriBus Navi, which can be applied in the global market.
FinTech: Moneytree offers an API platform service such as a household account book app for individuals and a bank account information for corporations. Founded in 2012 and invested by DG Ventures in 2013, it is currently stage C-1, with valuations estimated at US$50-100M and cumulative funding of US$5-10M.
Manufacturing: Initiated as a spin-off venture of Fujitsu Laboratories in 2006, and invested in Series F in 2019 in QD Laser, which provides new semiconductor laser solutions in a wide range of fields for telecommunications, industry, medical care and consumer use. Cumulative funding is expected to amount to US$88M.
Design / Marketing: Goodoatch, founded in 2011, has four bases in Japan and Germany, providing concept planning, UI / UX design, prototyping and career support for designers. DG Ventures invested in 2013 and 2016, respectively, and has grown steadily with sales of + 113% over the past three years.
Future of corporate venture capital
The goal of CVC is not only to return on investment, but more than that, it seems that it is more important to incorporate the technology of start-up companies and grow their own business at the landing. Traditional companies like Japan Airlines, for example, are also working on establishing a CVC in Silicon Valley to develop new services.
But the challenge starts after investment. Synergies are not born naturally, but only created. On the part of large companies, we want to be careful of jumping into the CVC trend through too optimistic imagination like “investing in startups sounds creates some good synergy naturally.”
Introduction of Mr. Ide
DG Ventures Investment Manager. Graduated from Keio University, Faculty of Law. While at school, worked as an intern at a leather brand to operate an EC site. Joined a major domestic financial institution as a new graduate and engaged in asset management for overseas institutional investors. Joined DG Ventures Co., Ltd. in April 2018. Invest in a wide range of promising startups worldwide, from seed to late stage (from website).
We would appreciate the insightful presentation!
The 3rd Brazil-Japan Startup Forum will be held in Tokyo on February 14 (Fri).
Guests from Japanese and Brazilian startups and venture capitals who were present at the Brazilian forum will be invited to talk about “Impressions of the Brazilian market, future business strategies and odds”. This is a must-see for anyone looking to enter or invest in Brazil!