Japan’s 18 Best CVC List:Corporate Venture Capital Comprehensive Guide
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Corporate Venture Capital for Fundraising in the Seed Stage
When foreign startups set out to establish their businesses in Japan, one significant challenge they often face is fundraising. Starting a full-fledged business in Japan, especially for those new to the country, can be costly, involving expenses such as office rent, equipment acquisition, and communication costs. For companies in the growth stage typical of venture businesses, obtaining funding during the seed stage is crucial to pave the way for business operations in Japan.
During the seed stage, fundraising involves two primary types of capital: initial investments and operational funding. It’s only when revenue surpasses operational expenses that surplus funds become available. Until then, raising capital remains a necessity.
Common methods for fundraising in the seed stage include:
- Self-funding
- Borrowing from family and friends
- Grants and subsidies
- Bank loans
- Investment from angel investors
- Investment from venture capital firms
In this discussion, we will focus on one specific type of venture capital, Corporate Venture Capital (CVC).
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Understanding the Difference Between CVC and VC
CVC stands for Corporate Venture Capital, where companies invest in venture businesses that have the potential to create synergies with their own areas of operation. Most CVC funds are formed using a company’s internal funds and are managed by in-house venture divisions or specialized subsidiaries dedicated to CVC activities.
While both CVC and VC involve investment from corporations, their goals are significantly different. CVC aims to acquire technology, knowledge, talent, and more, focusing on the potential for collaboration and mutual benefits. VC, on the other hand, primarily aims for capital gains, and their objectives differ greatly. Additionally, CVCs are often associated with large corporations in terms of funding size and have medium to long-term investment horizons. In contrast, VC funds are typically smaller, with shorter investment horizons compared to CVCs.
The State of CVC and List in Japan
As research and development within companies become more advanced globally, there is a growing awareness of open innovation. Consequently, the establishment of CVC within companies has increased in Japan as well.
Notably, CVC in Japan often operates as a department within a company. Fully independent CVCs are relatively rare, with a majority of them associated with high-tech companies, such as Sony and semiconductor manufacturing giant Tokyo Electron (TEL).
More than 50 companies are registered as CVC members with the Japan Venture Capital Association, and they are listed here primarily in English. While some CVCs may not have English versions of their websites, they might indeed support startup businesses. Nevertheless, multilingual presentation is essential for international talent. Furthermore, choosing independent CVCs was based on the assumption of faster responses.
| No | CVC | URL |
|---|---|---|
| 1 | Aflac Ventures Japan | https://aflacventuresjapan.com/en/ |
| 2 | MUFG Innovation Partners | https://www.ip.mufg.jp/ |
| 3 | NTT DOCOMO Ventures | https://www.nttdocomo-v.com/en/ |
| 4 | OMRON VENTURES | https://www.omron.com/omronventures/en/ |
| 5 | Kintetsu Venture Partners | https://kintetsu-vp.com/english/ |
| 6 | KDDI CORPORATION | https://www.kddi.com/english/ |
| 7 | K4 Ventures | http://www.k4v.co.jp/en/ |
| 8 | Cygames Capital | https://cygamescapital.co.jp/en/ |
| 9 | GMO VenturePartners | https://gmo-vp.com/en/ |
| 10 | Z Venture Capital | https://zvc.vc/en/ |
| 11 | Sony Financial Ventures | https://www.sonyfg.co.jp/index_en.html |
| 12 | Sony Innovation Fund | https://www.sonyinnovationfund.com/ |
| 13 | TEL Ventures | https://www.tel.com/rd/telvc/index.html |
| 14 | TEPCO Ventures | https://www.tepcoventures.co.jp/en/ |
| 15 | Honda Innovations | https://xcelerator.hondainnovations.com/ |
| 16 | Marubeni Ventures | https://www.marubeni-ventures.com/en/ |
| 17 | LOTTE VENTURES JAPAN | https://www.lotte-vc.co.jp/english/ |
| 18 | Yanmar Ventures | https://www.yanmar.com/global/yvs/ |
In Conclusion
The CVCs listed above in Japan are predominantly well-known companies. It’s worth noting that the list does not include major corporations like Toyota or Panasonic, which likely operate their CVCs. CVCs are highly specialized within specific industries, so even if a particular field doesn’t feature Japanese companies on the list, it doesn’t mean that business corporations in that sector don’t have their own CVCs. As CVCs focus on specific areas, reaching out to businesses within those sectors may be a prudent step.
