SBI Holdings, a major Japanese financial services company, has announced plans to launch a fund within 2023 aimed at investing in startups focused on Web3, artificial intelligence (AI), and the metaverse. The fund is expected to reach a scale of up to 100 billion yen, making it one of the largest venture capital initiatives in Japan.
The investment strategy involves allocating several hundred million to several billion yen per company, with a target of supporting 150 to 200 companies in total. Notably, the fund has already secured over 50 billion yen from prominent financial institutions, including Sumitomo Mitsui Banking Corporation and Mizuho Bank, as well as from Nippon Life Insurance and Daiwa Securities Group.
This move comes as part of Japan’s broader efforts to foster a more robust startup ecosystem. The Kishida administration, which has been actively working on the ‘New Capitalism’ initiative, has set ambitious goals to transform societal challenges into growth engines for a sustainable economy.
The ‘Startup Ecosystem Promotion Five-Year Plan’ established by the government in November 2022 aims to increase the current investment in startups from 800 billion yen to over 10 trillion yen by 2027. This plan includes the creation of 100 unicorn companies and the establishment of 100,000 startup firms, positioning Japan as a leading startup hub in Asia.
The government’s commitment to revising tax regulations to accommodate the unique needs of Web3 companies is a testament to the importance placed on this emerging sector. Recent tax reforms have already made provisions for ‘self-issued’ cryptocurrencies, with further revisions proposed for third-party-held virtual currencies.
Complementing these efforts, Japan has recently introduced a pivotal regulatory reform that permits startups to secure funding through cryptocurrencies. This development allows startups to utilize crypto assets as a viable alternative to traditional equity, thereby diversifying their financial avenues and aligning with global digital currency standards. The Investment Business Limited Partnerships (LPS) fund, a key component of this reform, provides startups with a novel pathway to access venture capital.
This initiative not only bolsters the liquidity options for startups but is also poised to invigorate the digital currency market in Japan. Such measures are set to promote a fertile ground for technological advancement and economic growth, marking a significant step in Japan’s integration of digital finance within its economic framework.
