Untapped Japan VC market targets mobile space - AVCJ Japan

According to Toshihisa Adachi, president of Itochu Technology Ventures, the VC industry is still exceptionally small given the number of potential targets. Last year saw JPY124 billion ($1.2 billion) in total venture capital investments in Japan, representing just 0.02% of the country's GDP. By comparison, venture investment in the US represented 0.12% of GDP.

"VC investment against GDP is low in Japan but recently we have had plenty of attractive investment opportunities," said Shinichi Takamiya, a partner with Globis Capital Partners. "The supply of funds is smaller than we would expect so it is a market where supply and demand is favorable for GPs. There is a huge opportunity."

He added that many LPs haven't paid attention to Japan, noting there is an information gap with regards to the scale of the opportunity.

Panelists were universally of the opinion that IT and internet-related businesses would continue to be the most attractive sector for VC investiment in the region.

"This is a game changing time with the rise of smart phones and tablets and the proportion of smart phone users becoming bigger," said Takao Ozawa, COO with YJ Capital. "With smart phone devices people feel the internet is closer and more services are being used via the internet. It will be a big change and I am paying a lot of attention."

Increasingly, Japanese VCs are also looking invest in places like Southeast Asia. CyberAgent Ventures has been particularly active in the region making investments in Vietnamese review webiste Foody.vn and Indonesian e-commerce platform Bilna.com.

"In the past, the US was ahead when it came to offering internet services but with the migration to smartphones and mobile internet, countries like Japan and Korea are becoming major players," said Soichi Tajima, president, of CyberAgent Ventures. "There is room to create more business in emerging economies and this is where Japanese VCs can play a role."

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• Topics
• North Asia
• Venture
• Southeast Asia
• Technology
• AVCJ Events
• Japan
• Venture
• TMT
• ITOCHU Technology Ventures
• Globis Capital Partners
• CyberAgent Ventures