Japan's KDDI, Global Brain launch third VC fund

Global Brain will act as GP for KDDI Open Innovation Fund III (KOIF III). This is in keeping with the vehicle’s predecessors KOIF I and KOIF II, which each closed at JPY5 billion in 2012 and 2014, respectively.

LP support for the new fund has not been clarified. However, AVCJ records reveal that KOIF II was backed by KDDI and a mix of Japanese corporates including Mitsui & Co.

According to a statement, KOIF III will target start-ups in technologies related to 5G communications systems with support from three more tightly focused investment programs. These programs will be associated with existing KDDI-backed companies Arise, Soracom, and Supership, focusing respectively on the fields of artificial intelligence (AI), the internet-of-things (IoT), and data marketing.

KDDI has stressed that AI and IoT will become crucial development areas as 5G communications come into more widespread use. 5G denotes a fifth generation of wireless network deployment that is expected to be commercially available globally by 2020.

The Tokyo-listed telecoms giant hopes that expanding its IoT business will provide a counterweight to its declining mobile service subscription base. Recent efforts to this effect include the acquisition of Soracom earlier this year at a reported valuation of around JPY20 billion.

Founded in 1998, Global Brain focuses on seed to middle-stage IT start-ups with a focus on leveraging pan-Asian and US-connected networks. Its sixth fund was launched in late 2016 with a target of JPY20 billion and LP support from the KOIF program.

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