Japan's Beyond Next raises $67m for third VC fund
Japanese deep tech investor Beyond Next Ventures has achieved a first close of JPY 10bn (USD 67.1m) on its third flagship fund. The target is JPY 25bn.
About 80% of the capital to date has come from investors in Funds I and II, including the Organization for Small & Medium Enterprises and Regional Innovation, Japan (SMRJ), Mitsubishi UFJ Bank, Dai-ichi Life Insurance, and Tokyo Century.
New LPs include SMBC Nikko Securities, Mitsubishi UFJ Trust and Banking, FFG Venture Business Partners, and medical equipment company Yagami Seisakusho.
Fund I closed on JPY 5.5bn in 2016, while Fund II closed on JPY 16.5bn in 2020. Two accelerator funds of unconfirmed size were raised in 2019 in partnership with various local universities.
Fund III will aim to lead most of its investments, providing up to JPY 2bn per company. Favourd categories include healthcare, including biotech, food and agriculture, digital space tech, and climate tech.
Recognising the long gestation timeframes in deep tech, the operation period will be extended one year versus prior vintages to 11 years. This can be further extended to 14 years with LP approval on a case-by-case basis.
The fund will invest across the start-up lifecycle, although Beyond Next has stressed it aims to fill a perceived gap in the mid to late stages locally. The firm observed that this gap was a major obstacle in the development of Japanese unicorns.
There will be an effort to internationalize operations, such as supporting portfolio companies to go cross-border, especially in India. Beyond Next established a subsidiary in India in 2020 and realized an exit in the market last year with the sale of jobs marketplace GigIndia to payments platform PhonePe.
The fund will also implement impact measurement and management for all investee companies, according to a statement. This will include evaluation of the social impact created by each investee company, continuous measurement post-investment, and the development of environmental, social, and governance (ESG) policies.
Beyond Next has invested in about 80 deep tech start-ups mainly since its inception in 2014, many of which have been incubated through its university partnership networks.
The firm has achieved seven exits, including two IPOs and five M&As. Most recently, it sold its position in non-fungible token (NFT) marketplace Suishow to blockchain gaming company Mobile Factory as part of a JPY 820m deal.
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