Fund focus: Gree widens its regional scope

Gree Ventures was established in 2011 with a brief to make technology investments outside of the scope of its parent, Tokyo-listed gaming company Gree. Structured as an independent firm, the VC unit took an initial $20 million from Gree but then began raising capital from external investors. Its debut fund closed at $50 million in 2014.

A second vehicle – AT-II Investment Limited Partnership Fund – launched in April last year, and recently closed at $67 million, beating the $60 million target. Gree contributed $20 million, with the remainder coming from Japanese corporates and financial institutions, many of them existing investors. They include the Organization for Small & Medium Enterprises and Regional Innovation as well as several members of Mizuho Financial Group.

While Gree Ventures’ first fund focused on Southeast Asia and Japan, the remit has now expanded to include India. “There are multiple reasons. India is an exciting market with many good companies being formed. More importantly, the vision of Gree Ventures is to cover Asia as a whole, so it makes sense to add India to our coverage, enabling more collaboration between start-ups in India, Southeast Asia and Japan,” says Nikhil Kapur, a senior investment manager at Gree Ventures.

However, India is likely to account for only a small portion of the latest fund, with exposure increasingly gradually over the next 3-5 five years as the team becomes more involved in the market. Similar to its predecessor, the Fund II corpus will be split evenly between Japan and other countries. Gree Ventures will back about 30 companies in total, providing financing of $500,000 to $3 million for seed through Series A rounds.

While B2B enterprise software is a common theme in the developed markets of Japan and Singapore, the focus in emerging markets will be B2C business investment opportunities, including e-commerce and financial technology. The fund has so far invested in 10 Asian start-ups, including Indonesian mobile payments platform Ayopop, and Indian female-focused content platform PopXo.

Gree’s domestic and overseas network serves as a means of identifying promising investment targets and conduct due diligence, as well as to provide deeper support to portfolio companies. The parent company is best positioned to assess emerging themes and opportunities within its core business area and so investments of that nature will continue to be made off its balance sheet. For Gree Ventures, the aim is still to generate returns by thinking outside the corporate box.

“We share resources with Gree, but we are a financial-driven investor,” says Kapur. “Gree isn’t interested in buying our portfolio companies because we invest in firms that have business synergies with it. Of course, if it does find something interest for its business, it can make an offer [like any other prospective buyer].” 

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• Topics
• North Asia
• Southeast Asia
• South Asia
• Fundraising
• Venture
• Technology
• Gree Ventures
• TMT