Fund focus: Geodesic helps US start-ups go big in Japan

Geodesic Capital has a singular vision - to bridge the gap between Silicon Valley and Japan - that was arrived at from two very different vantage points. Ashvin Bachireddy was leading Andreessen Horowitz's growth-stage investment practice and had heard many entrepreneurs talk of the frustrations of entering Asia and Japan in particular. John Roos, formerly CEO of law firm Wilson Sonsini and then US ambassador to Japan, had first-hand knowledge of Japan's interest in US technology.

"We put our heads together and this idea popped. It made a lot of sense to partner with someone who had a real focus and energy on building out the Japan piece while I spend time doing what I've done, which is investing," says Bachireddy, who serves as founding partner of Geodesic alongside Roos.

Two key drivers of the technology boom in the US and Asia are the drop in the costs associated with starting a company - there is a readymade cloud-based infrastructure available to entrepreneurs - and the sheer size of the end-user market, best captured by rising smart phone penetration. However, Bachireddy found that the process of scaling a business is much the same as in previous cycles.

"Late-stage entrepreneurs in particular continue to struggle with international expansion," he says. "It makes sense: you can't run the same playbook everywhere in the world because markets are different. A lot of entrepreneurs I was talking to saw Japan as their first stop when going into Asia - they look at the size of the market, the savvy technology consumer base, the businesses that have historically spent a good amount of money on technology products - but if you are not calibrated on how to approach the market you can spend significant time and resources and ultimately get frustrated."

Geodesic now has a $335 million fund to help out these entrepreneurs. The firm targeted Asian LPs specifically and the investor roster is a who's who of corporate Japan: Mitsubishi Corporation and several of its associate entities are involved, as well as Sumitomo Mitsui Banking Corporation, Sompo Japan Nipponkoa Insurance, Nikon Corporation, Development Bank of Japan and Toho Bank.

Marcus Otsuji, previously of Apple Japan, has been hired to lead the local team in Japan. Additional support will come from James Kondo, formerly Twitter's Japan chairman, who has joined as a special advisor. They will help Geodesic's portfolio companies hire local staff, figure out go-to-market strategies, and generally become more attuned to the business culture and speed of execution.

Five investments have already been made from the fund. Bachireddy cites one of them, cloud services provider Instant Logic, in order to illustrate Geodesic's value-add. "We have been helping them in Japan ahead of them sending any resources there," he says. "We are making customer introductions and offering strategic advice on the business model so they can take a test run on how their proposition would be in Japan. That way they can define what resources they want to use without going in blind."

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• Topics
• North Asia
• North America
• Fundraising
• GPs
• Technology
• TMT
• Japan
• USA