Japan's Drone Fund secures anchor LPs for third vintage
Japan’s Drone Fund has reached a first close of undisclosed size on its third VC fund, with SMBC Nikko Securities and NTT Docomo coming in as anchor LPs. The target is JPY10 billion ($95 million).
SoftBank and technology-focused investor Leave A Nest also made commitments, according to a statement. They were joined by farming equipment manufacturer Kobashi Industries and geospatial data technology provider Kokusai Kogyo. A final close is planned for March 2021.
Drone Fund closed its first two funds at JPY1.6 billion and JPY5.2 billion, respectively, in 2018 and 2019. Both vehicles were raised in close partnership with local incubator Chiba Dojo. Japan Asia Group, an engineering consultancy that owns Kokusai Kogyo, contributed to both funds, as did Daiwa Securities Group, FFG Venture Business Partners, Canal Ventures, and Mistletoe.
Fund III will invest in a range of air mobility technologies, including sensors and data analysis tools, as well as transportation, logistics, and industrial-use drones. There will be a strong focus on leveraging developments in 5G connectivity, vehicle electrification, and automated mobility in both rural and urban areas to advance social acceptance and practical implementation of drone systems.
Drone Fund flagged local issues such as aging infrastructure and demographics, as well as global themes around climate change, epidemics, and growing natural disaster risks, as tailwinds for this mandate. The plan coincides with a policy shift from Japan’s government, including a decision to lift a ban on level-four drone operations in populated areas in 2022. Level four drone use refers to flight beyond the operator’s visual line of sight.
Drone Fund has invested in more than 40 start-ups to date, including Autonomous Control Systems Laboratory, which became the first drone-based company to list on the Tokyo Stock Exchange’s Mothers board in December 2018.
Standout portfolio companies include SkyDrive, a flying car maker developing what is said to be the smallest-ever electric vertical take-off and landing vehicle. The multi-coptor – 2 meters high by 4 m wide and 4 m long – requires only as much space on the ground as two parked cars.
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