SBI Holdings has unveiled an investment fund of significant proportions, signaling Japan’s dedication to the growth of its emerging startup sector. With an allocation of $663 million, this fund will support new ventures in Web3, artificial intelligence (AI), and the metaverse.
This move is critical to Japan’s overarching strategy to encourage innovation and establish its role as a significant force in the worldwide tech landscape.
The new fund of Japanese financial giant SBI Holdings will begin investing in Web3, AI, metaverse and other start-up companies, totaling 150 to 200 companies. The total fund is expected to reach $663 million. Half of the LPs come from other traditional consortiums in Japan.…
— Wu Blockchain (@WuBlockchain) November 9, 2023
Strengthening the Startup Ecosystem
SBI Holdings’ new fund will begin operations by the end of this year, targeting a portfolio of 150–200 companies. Each investment is expected to range from hundreds of millions to tens of billions of yen, reflecting a commitment to support a diverse group of startups in various stages of growth. This approach underscores a clear intention to propel a broad spectrum of innovative ventures.
Furthermore, the fund is not a standalone effort since it is backed by a solid commitment of over ¥50 billion from financial institutions such as Sumitomo Mitsui Banking Corporation, Mizuho Bank, Nippon Life Insurance Company, and Daiwa Securities Group. These alliances herald a new era of collaborative support for Japan’s startups, providing a robust foundation for their global competitiveness.
Aligning with the National Vision
This financial endeavor by SBI Holdings is in lockstep with the Japanese government’s “Five-Year Plan for Startup Development,” orchestrated by Prime Minister Kishida’s administration. The plan seeks to magnify the current ¥800 billion investment in startups and escalate it to approximately ¥10 trillion by 2027. The aim is to transform Japan into Asia’s most prominent startup hub and a significant global cluster of startup activity.
Exciting news as we have officially kicked off this year's #IVSCrypto conference in Kyoto ⛩️
— Infinity Ventures Crypto (IVC) (@ivcryptofund) June 28, 2023
The government’s strategy extends beyond financial investment since it includes regulatory innovations, such as permitting startups to issue crypto tokens to attract public funding. Moreover, this decision opens up new avenues for startups to secure the capital they need while reflecting Japan’s progressive stance on cryptocurrency regulations.
Regulatory Evolution for a Digital Age
As the startup landscape continues to incorporate cutting-edge technologies like Web3 and AI, Japan recognizes the importance of evolving its regulatory and tax frameworks to support these sectors. Consequently, the government is actively revising its tax system to cater to the needs of Web3 companies, with a detailed tax reform outline expected by mid-December.
🇯🇵#MUFG launches stablecoin platform as new law takes effect: in#Japan is the first major market to put a regulatory environment around #stablecoins into law.@euromoney: https://t.co/BtH8KeZXv2 @mufgcr_official #digitalcurrency #regulation pic.twitter.com/ozJ6L1Knzi
— Urs Bolt (@UrsBolt) June 15, 2023
Moreover, Japan is already leading the charge in crypto regulation, recently implementing new stablecoin legislation. These proactive regulatory efforts demonstrate a keen understanding of the importance of providing startups with a stable and supportive environment.
With the introduction of SBI Holdings’ new fund, Japan could launch a new chapter in its history of technical innovation. Moreover, startups specializing in Web3, AI, and the metaverse now have a significant new resource that can assist them in expanding and competing internationally.
As Japan’s environment for new businesses evolves, funds such as SBI Holdings will become more critical in overcoming the typical obstacles that hinder new companies. In addition, access to capital, a favorable regulatory framework, and collaborations with existing financial firms all offer fertile ground for startups to thrive.