News > Venture Capital

The state-backed VC fund shaping the future of Japanese tech
<p>If you have never heard of the Innovation Network Corporation of Japan (INCJ) then you really haven't been paying attention to Japan’s tech industry.</p> <p>INCJ made headlines again last week when shares in Sharp Corp. soared on the news that the state-backed fund was mulling a 200 billion yen ($1.7 billion) bailout for the ailing electronics giant. </p> <p>Such deals are par for the course for INCJ which has spent the last six years spearheading the government’s efforts to restore Japan’s status as a leader in technology and innovation. </p> <p>It has mostly made a name for itself through its private equity and venture capital investment activity. Backed by the biggest names in Japanese tech - including Canon, Panasonic, Hitachi, Sony, Sharp, and Toshiba - and with about 2 trillion yen of investable capital, it has some serious firepower. </p> <p>Sharp is the most recent example of INCJ supporting the country’s embattled electronics giants. It is the largest shareholder of Japan Display, a firm it created  out of the LCD divisions of Hitachi, Toshiba, and Sony. The fund also famously gazumped  U.S. private equity major KKR in 2012 through its acquisition of chipmaker Renesas. </p> <p>Unsurprisingly, INCJ has come in for a lot of flak from its critics for propping up, rather than revitalising, its distressed targets. That said, rescuing giants is only part of INCJ’s strategy. The fund is also a major player when it come to early stage investments. Around three-quarters of the 90 investments made by INCJ since its inception have involved early stage companies. </p> <p>This is likely to be the real area of focus for Toshiyuki Shiga, Nissan’s former COO who took over as chair of INCJ in June, as the Japanese government looks to replicate some of Silicon Valley’s success in Japan rather just revive some of Japan's own past glories.<br /> Photo: Curt Smith</p>
The love affair between VCs and the media is unraveling
<p>It's tough going from hero to zero. But as the startup craze ages and cracks in the facade of many startups (or at least their valuations) are beginning to appear. Most recently, The Wall Street Journal published a searing story on startup sweetheart Theranos, the lab that takes "nanotainers" of blood from the phlebotimically-challenged.</p> <p>Venture capitalists didn't take too well to the challenge to the private company, valued at $9 billion. Business Insider says this is becoming a bit of a pattern these days: The fawning is mostly over.<br /> Nobody likes to be questioned.</p> <p>But lately, some of Silicon Valley's big tech investors seem to be particularly upset that journalists are questioning some of the valley's hottest startups.</p> <p>There's a fundamental difference in point of view here. The funders see first-hand how hard it is to build something and sympathize with the struggle. The journalists are supposed to be as objective and careful as possible and report what they find — even if some people don't like it.<br /> That's an incredibly nice way of saying that some journalists aren't swallowing startup news releases without questions. Seems like a backhand compliment: The press corps that largely missed both the financial crisis and Bernie Madoff can hardly be called fierce or clairvoyant.</p> <p>And BI also notes that for every upset VC there are also some pretty experienced investors who are also ringing the alarm -- including Marc Andreessen and Mike Mortiz of Sequoia. Not bad company to be in.<br /> Photo: Owlana</p>
Founders, investors gather in Hong Kong to share past failures
<p>Learning and growing from one's past failures is a core part of startup culture and this week a group of founders will gather in Hong Kong to observe that tradition at the 2nd annual Postmortem conference.</p> <p>The event will be held at KPMG's Causeway Bay office at Hysan Place and will feature a line-up of HK's best startup founders, investors and mentors sharing their personal failures, pivots, regrets, and mea culpas. Confirmed speakers at the event include:</p> <p> Deepak Madnani, Paperclip<br /> Daniel Walker, Dragon Law<br /> Christopher Geary, Asianet Group<br /> Elsa Chan, Jetlun<br /> Andrea Livotto, Perpetu<br /> Sam Gellman, Uber<br /> Jeffrey Broer, Grayscale<br /> Donna NguyenPhuoc, Angel investor</p> <p>The event starts tomorrow (October 17) but a handful of tickets are still available.<br /> Photo: Steve Jurvetson<br /> &nbsp;</p> <p>&nbsp;</p>
Mega rounds keep rolling in amid IPO slump
<p>It be might a lousy exit market right now but the big VC deals have still been coming through thick and fast these past three months with 68 startups globally each raising $100 million or more, according to a new report.</p> <p>The joint report by KPMG and CB Insights reveals there have been 170 of these so-called mega rounds for the first nine months of the year raising an aggregate $19 billion. In total VC-backed startups raised $37.6 billion worldwide during the three months and $98.4 billion for the year so far, already exceeding the 2014’s $88.7 billion total.  </p> <p>Asian mega deals in particular tipped the scales for the third quarter, with massive investments into the likes of Didi Kuaidi, LY.com, One97 Communication and Eleme. The top five deals in Asia accounted for $5.3 billion, or 39% of fundraising in the region. </p> <p>But the report also shows that while there are more late stage deals, there are fewer IPO exits than previous years, exacerbated by the fact that China suspended IPOs once again in July. The number of late-stage investments has affected the availability of cash for seed-stage investments. Despite more funds investing at the seed stage, seed investments have dropped to a five-quarter low of 28%, globally. </p> <p>In the short term at least it seems the gigantic late stage deals will continue to spur the rise of the unicorns - startups valued at $1 billion or more. There were 23 new unicorns in the quarter: 17 in the US, 3 in Asia and 3 in Europe.<br /> Photo: Maxwell Hamilton</p>
Underserved and uncompetitive: Why VCs are dropping anchor in Vietnam
Vietnam’s young demographics and increasingly tech-savvy population are making the country a draw for tech investors but the market is still largely underserved, say local venture capitalists (VCs). 500 Startups’ recent decision to add two new venture partners - Binh Tran and Eddie Thai - in Vietnam is the  latest indication that more VCs are interested in the country, The
Strength in numbers: Hong Kong's burgeoning crowdfunding industry
<p>Crowdfunding is lowering the entry barriers for would-be venture capitalists worldwide. As one of Asia's bigggest financial centers, Hong Kong is quickly becoming a breeding ground for equity crowdfunding platform -- but regulators need to keep pace.</p> <p>To date, the crowdfunding ecosystem has been populated by reward-based platforms -- think Kickstarter and Indigogo in the U.S. - this is because offering material rewards instead of equity allows crowdfunding to avoid regulatory headaches while accessing a wider of pool of unaccrediated investors. Hong Kong's latest addition to this ecosystem is rewards-based platform SparkRaise. Its founder Yeone Moser Fok tells NexChange:</p> <p>“Crowdfunding platforms have the potential to turn traditional fundraising on its head.  It is becoming easier to invest in startups and more people now have the chance to back the projects they love.”</p> <p>She adds that these platforms offer startups two things: customer acquisition and product validation. Raising capital to complete the first run of a product is not only difficult, it's a big risk.  Crowdfunding plaftorm help startups raise capital while ensuring there is demand for a product. However, Fok notes that future  advances in regulation could see equity-based platforms being more widelyt adopted. She adds:</p> <p>“The JOBS Act in the U.S. has been a big leap forward for equity crowdfunding but it’s still early days.  In Asia, particularly in Hong Kong, there are still more regulatory hurdles to jump through before we see more equity-based platforms here.”<br /> That is not to suggest equity-based platforms do not exist in Hong Kong. There already platforms like BigColors, Colony88, and Investable that offer some form of equity crowdfunding, though exisiting regulations mean that investments are restricted to professional investors, meaning the minimum ticket size excludes mom and pop backers. Investable founder Jennifer Carver explains:</p> <p>"Right now the minumm investment is $10,000 on Investable and as an  angel investor you always have to be prepared to just say goodbye to that money. That said, we have a broad range of services so that our startups stand a better chance of survival than most, but it's still a high risk investment that's not suitable for all types of investors"<br />  Photo: James Cridland</p>
The Tesla graveyard: Elon Musk calls out Apple
<p> Year to date, Tesla Motors Inc TSLA 2.66% has outperformed Apple Inc. AAPL 2.39%, gaining nearly 2 percent versus a 1 percent decline in Apple.<br /> Speaking with a German newspaper, Tesla CEO Elon Musk dismissed concerns that Apple was poaching the company's talent, saying that Apple has "hired people we've fired."<br /> Musk added that, "we always jokingly call Apple the 'Tesla Graveyard.' If you don't make it at Tesla, you go work at Apple."</p> <p>Read more at Benzinga, here.<br /> Photo: Thomas Hawk</p>
Video: VC explains why Hong Kong is becoming a vital fintech hub
<p>VC explains why Hong Kong is becoming a vital fintech hub from NexChange on Vimeo.</p>
VCs tech investments trump exits for the first time in years
<p>&nbsp;</p> <p>Investors are now pumping more money into US startups than they are getting back in the form of exits.</p> <p>According to a report by CBInsights, total funding for this year has reached $42 billion, about $16 billion more than the $26 billion generated through exits.</p> <p>What's more, the VC investment total for the year to date has already surpassed that of 2014, and is more than double that of the 2010.  Exits meanwhile are less than a fifth of what they were in 2012.</p> <p>Fluctuations in exits and investments are to be expected over a long period. VC investments typically have a 5-year lifespan, while the fund life-cycle is anywhere between 8-10 years.</p> <p>Many of the VC funds making exits and returning capital to investors during 2012 have since returned to the market with follow-on funds. This means a lot of those VCs exiting investments in 2012 have raised and are spending the next three to four years deploying capital.</p> <p>That said, there are other trends to consider. Companies are staying private longer and funding rounds are getting larger, pushing up private market valuations. The upshot is that the funding aggregate is exceeding exit valuations faster -- even if we witness a number of large liquidity events in the fourth quarter.<br /> Photo: Indigo Skies</p>
Startup heavy-hitters in Indonesia launch $150 million fund for early stage companies
<p>Three top startup investors are putting together a new band with support from the Indonesian family conglomerate Lippo Group.</p> <p>The new firm, Venturra Capital, will target Series A and B deals in Southeast Asia raising between $2 million and $5 million -- but will also consider seed candidates.  This will be an interesting group to follow -- the founders have impressive credentials: Stefan Jung is co-founder of German incubator Rocket Internet; Johny Riady, was a director at Lippo Group, and Rudy Ramawy was in charge of Indonesia for Google.</p> <p>Tech in Asia reports the fund has already raised $15o million, mostly from  Lippo. The fund is successor to Lippo Digital Venture (LDV) - Lippo's corporate VC arm where Ramawy was managing partner.</p> <p>Venturra has absorbed LDV's portfolio of investments previously made off of Lippo's balance sheet. However, Lippo's role will be restricted to limited partner.</p> <p>Between them the founders have an investment track record the covers start-ups such as GrabTaxi, Traveloka, HappyFresh, Bridestory, Munchery, and MatahariMall. The fund will focus on e-commerce, fintech, and healthcare.  Jung - who last set up Monk's Hill Ventures' Jakarta office - says the firm is open to earlier stage investments:<br /> "We are considering ourselves agnostic in terms of stage preference. We are still keeping ourselves open to early stage and seed rounds. If we’ve known the entrepreneur for a while and want to support them from day one, then we will surely consider investing.”<br /> Photo: The Diary of a Hotel Addict<br /> &nbsp;</p>