Japan's MedVenture closes second fund at $95m

LPs include Development Bank of Japan, Fukoku Mutual Life Insurance Company, Shizuoka Bank, Japan Lifeline Co, JMS, Tanaka Kikinzoku Kogyo, Nihon Kohden Corporation, Zeon Medical, Hamamatsu Iwata Shinkin Bank, Sekisui Chemical, and the Organization for Small & Medium Enterprises and Regional Innovation Japan.

MedVenture’s first fund closed at JPY6 billion in 2013. It has invested in 12 companies to date, of which four have been acquired by large medical device corporations.

The follow-up, known as MPI-2, has made eight investments to date both in Japan and overseas and achieved one exit with the sale of US insulin pen maker Companion Medical to global player Medtronic. Much of the plan involves bridging Japanese life sciences companies with overseas device start-ups.

MedVenture claims that Japan has a JPY950 billion trade deficit in medical devices, with therapeutic medical devices accounting for half of that.

“Many of the top therapeutic medical device manufacturers worldwide actively acquire start-up companies to expand their product portfolio and strengthen their position within the market. The development of a similar ecosystem in Japan is vital for the continued growth of the Japanese medical device market,” the firm said in a statement.

Recent activity by MPI-2 includes a seed-stage commitment in March to Tokyo-based Alivas, which develops devices for the treatment of chronic constipation, a condition said to impact 14% of the general population. MedVenture invested alongside DBJ Capital, a VC subsidiary of Development Bank of Japan.

Medical devices have steadily declined as an investment destination in recent years due to industry consolidation and increasing complications around regulatory hurdles, and commercialization processes. Specialist investors have continued to find value, however, in the potential to serve massive markets with relatively underdeveloped innovation ecosystems.

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• Topics
• North Asia
• Fundraising
• Venture
• Healthcare
• Technology
• Japan
• The Development Bank of Japan (DBJ)
• Organization for Small & Medium Enterprises and Regional Innovation, Japan (SMRJ)