Fund focus: I-nest targets lifestyle technologies

Japan’s aging trend is so often framed as workforce meltdown that one could be forgiven for seeing the opportunity set exclusively as a matter of crisis management. Healthcare capacity expansion and industrial automation are the hotspots in this line of thinking, and enterprise-facing business models have benefited as a result.

Local VC firm I-nest Capital is looking to carve a contrary path with a JPY6.6 billion ($60 million) debut fund that will focus on lifestyle and entertainment sectors as longer lives seek new kinds of distractions, and technology-enhanced workflows provide efficiency benefits to individuals and companies. 

“People have more leisure time due to developments in technology and changes in social systems. We think this trend has strong tailwinds for entertainment and lifestyle businesses,” says Shigeo Tsukamoto (pictured, left), a partner at I-nest. “That could attract more investment, and many more venture businesses with growth potential would enter the sector.”

Tsukamoto set up I-nest last year with Takashi Yamanaka (pictured, right) after both had redirected careers at Mizuho Financial Group into the VC world. Yamanaka, formerly of Mizuho Bank, went on to become a managing director at IT investor Mobile Internet Capital, while Tsukamoto left the conglomerate to establish a business consultancy called GSW Corporation that had significant exposure to start-ups.

Their debut eclipsed its target of JPY6 billion with support from the likes of Mizuho Bank, Mizuho Securities Principal Investment, Fuji Startup Ventures, financial technology provider Power Solutions, telecoms leader NTT Docomo, and Tokyo Boeki Holdings, a group that focuses on resources, energy, and equipment manufacturing.

The industrial bent of the strategic investors underscores the subversive nature of I-nest’s approach to lifestyle categories. The VC has identified “improvement in productivity” as an essential challenge to the entertainment sector, and expects its LP base to be supportive of open innovation in the portfolio.

Technologies related to 5G connectivity, virtual reality, and augmented reality are expected to be core areas, so at first glance, the fund’s only investment to date appears somewhat off-target. I-nest has provided a seed round to a surveillance camera system and biometric authentication developer called Secure. But the deal is perhaps most insightful as a reminder that consumer-entertainment angles can be gleaned from even the most enterprise-oriented of businesses.

“The technologies that Secure is working on would be essential for the entertainment and lifestyle sector,” Tsukamoto adds. “We find there is a lot of opportunity to apply those technologies in areas such as facial recognition systems. We expect Secure will develop their existing business and enter into new business fields in entertainment and lifestyle."

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• Topics
• North Asia
• Fundraising
• Venture
• Technology
• Japan
• Venture