Japan's Jafco closes sixth flagship VC fund at $765m
Jafco, Japan’s largest venture capital investor, has confirmed a final close on its sixth flagship fund at the hard cap of JPY80 billion ($765 million).
The fund, known as SV6, launched in June last year with a JPY20 million contribution from Jafco and began raising capital from external investors two months later. SV6 is the VC firm’s first fund since introducing a partnership model last year. It is also the first fund in which individual partners have been able to contribute capital in their right.
The final corpus comprises a JPY29.1 billion contribution from the GP and JPY50.9 billion from 75 LPs, according to a release. The LP base is 71% financial institutions, 25% corporations, and 4% other investors. Most had contributed to previous vintages. Jafco closed its SV5 fund in 2016 at JPY75 billion, of which JPY43 billion came from external investors including machinery contracting business Fuyo General Lease.
Jafco’s flagship funds typically invest globally, with a focus on Japan, Asia, and the US. However, SV6 will target domestic opportunities exclusively. The firm has allocated about 75% of the corpus for venture investments and 25% for buyouts. Investment activity in Japan is historically sector agnostic albeit with a strong technology focus. Consumer internet, enterprise software, life sciences, industrials, and cleantech are core areas.
Jafco was founded in 1973 as Japan Associated Finance and set up the country’s first VC fund in 1982, going on to launch US and Asia ex-Japan focused divisions in 1984 and 2017, respectively. The latest fund from Jafco Asia closed at $140 million in 2017 while the most recent US-focused vehicle, Icon Ventures V, raised $260 million in 2012 under the name Jafco Technology Partners V. The firm claims to have about 1,200 investors in its various funds.
Japan’s domestic venture capital ecosystem has grown rapidly in recent years on the back of a stronger exit market and traditional industrial leaders pivoting their business models toward more digital and advanced technologies. Recent fundraising activity includes Globis Capital Partners raising JPY36 billion for its sixth fund, which is targeting JPY37.5 billion. Earlier this month, I-nest Capital, a newly established firm focusing on lifestyle categories, raised JPY6.6 billion for its debut vehicle.
Image: Japanexpertena, 2014 (CC BY-SA)
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