Japan's Miyako targets $140m for third VC fund

Japan Investment Corporation (JIC), a government entity focused on professionalising local fund managers that have demonstrated traction but remain largely overlooked, provided JPY 2bn. JIC also has a specific interest in funds from academia and regional areas.

Miyako’s second fund closed on JPY 14.2bn in 2021, while its debut raised JPY 4.2bn in 2016. Prior to launching independent vehicles, Miyako managed the Kyoto University Venture Fund, a JPY 6bn pool of capital set up in 2013.

Historically, LPs have included regional banks, Japan Post Bank, MUFG Bank, Mizuho Securities, Dai-ichi Life Insurance, Nomura Holdings, Taiyo Oil, and SMRJ, a government agency focused on small businesses and regional innovation.

Miyako invests primarily at early stages, targeting start-ups connected with universities and research institutes. This includes Kyoto University but not exclusively so. The vision is to create an industry-academia ecosystem. A minority of deal flow will involve growth-stage, pre-IPO, and public companies.

The mandate spans hardware and software concepts from artificial intelligence (AI) and consumer web3 to industrial robotics and internet-of-things (IoT). Drones, blockchain authentication, and advertising technology are part of the mix.

Focus areas also include life science, including drug creation, regenerative medicine, and medical beauty equipment. There is interest in agriculture themes such as fishery innovations and health food, as well as alternative energies and environmental technologies, including chemicals and materials.

Miyako was founded in 2013 by Satoshi Yamaguchi, previously of Jafco, and Hiroaki Okahashi, who previously helped established start-up policy for the Ministry of Economy, Trade, and Industry. It has deployed 22bn across 53 start-ups to date.

Investees include Hacarus, an AI provider for industrial and medical applications, VLP Therapeutics, a vaccine developer, and LocationMind, an IoT company that tracks the movement of people. Last year, Miyako provided the entire JPY 1.4bn Series A round for cryptocurrency rewards app SocialGood.

There is also Pocketalk, a mobile real-time voice translator app that works in more than 80 languages. Pocketalk, which has raised about JPY 2.3bn to date, has seen significant traction in US hospitals and schools and is now contemplating a US IPO. Miyako backed the company as recently as December.

Bridging portfolio companies with the US is an important part of the value proposition. Miyako maintains a base in Silicon Valley and claims to take a hands-on approach to taking companies overseas. Tsunesaburo Sugaya, a Silicon Valley-based managing director at the firm, spent 12 years as a general partner at Jafco’s US unit Icon Ventures.

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• Topics
• North Asia
• Fundraising
• Venture
• Technology
• Japan
• Japan Investment Corporation (JIC)
• deep-tech
• Pharmaceuticals
• Agriculture
• energy