Japan ministries approve $80m for Osaka University VC fund
Japan's Ministry of Economy, Trade & Industry (METI), and the Ministry of Education, Culture, Sports, Science & Technology (MEXT) have approved a JPY10 billion ($80 million) investment by Osaka University into its recently launched venture capital arm.
Osaka University Venture Capital (OUVC) was established in December last year. The fund wants to back university-initiated start-ups looking to commercialize innovation based on academic research. These companies typically struggle to raise venture capital as it can take anywhere between 5-10 years to bring a concept to market.
As a result, the fund - OUVC1 - is expected to have a lifespan of up to 15 years. It is unclear how large the final corpus will be. According to a release, OUVC, which is led by representative director Yoshio Matsuma, will put in an additional JPY10 million.
The university's contribution to the fund will include a part of the JPY16.6 billion put aside by the government to support university-backed VC funds. The fund is also expected to raise additional capital from the private sector.
Osaka University is one of three universities that have recently applied to set up, invest in, their own funds focused on research start-ups. This has only just been permitted under the Industrial Competitiveness Enhancement Act brought in the government last year. Kyoto University Innovation Capital and Tohoku University Venture Partners are among the other funds to apply.
Historically, the bulk of VC investments in university-initiated start-ups have come from University of Tokyo Edge Capital (UTEC), which was formed in 2004. The fund's LPs include Sumitomo Mitsui Banking Corporation, Seibu Shinkin Bank and the government-owned Innovation Network Corporation of Japan (INCJ), which also makes investment alongside UTEC.
Kyoto University has also run its own affiliated VC - Miyako Capital - since 2007. It launched its second $60 million vehicle in 2013. However, the fund does not focus solely on university start-ups, targetnig companies in Japan and the rest of Asia.
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