Table of Contents
First, please tell us about Headline and IVC’s business.
Akio Tanaka (hereinafter, Tanaka): Headline is an investment fund that was established when the venture capital division of Bertelsmann, a major European media group, became independent. It is a venture capital that invests in regular equity (stocks) rather than Web 3.0, and currently has assets under management of about 600 billion yen globally.
We started in Europe and then expanded to the US, Asia, and South America. As I was originally in charge of venture investments, mainly in Asia, at Adobe, I raised my hand and started Headline Asia.
Headline was also investing in the Web 3.0 field as part of its overall strategy, but gradually the number of Web 3.0 projects that took the form of investing in tokens increased. So we started IVC as a "fund that invests in tokens" rather than equity.
IVC invests in various Web 3.0 projects not only in Asia but globally.
Until last year, the cryptocurrency market was sluggish, and it was even called the "crypto winter." Recently, the market seems to be gradually improving, but how do you view the Web 3.0 industry as of March 2024?
Tanaka: Even during the winter, there were still people who were seriously working on Web 3.0, and it seems like we are finally starting to see signs of a hit.
One example of something we are investing in is a project called "Belo," which is a fintech business in South America. This project had been simmering for a long time, but it has recently picked up momentum, with sales of just under 200 million yen in the fourth quarter of 2023 alone, and about half of that in January 2024 alone.
In addition, the RWA (Real World Asset = tokenization of real objects and assets) project in India to digitally tokenize agricultural commodities has expanded to a scale of 100 billion yen, and buds are starting to sprout from "under the winter snow."
IVC invests in Web 3.0 projects in a variety of fields. What do you consider when making investments?
Tanaka: We mainly invest in the seed stage, before or immediately after the company is founded. There is still a product concept, a schedule for token issuance, and perhaps a community. In other words, it may be said that there is nothing.
The first thing that is important is what kind of people the founders and team members are. Their careers and reputations before starting the company are important, so we look at those first.
In addition, in the Web 3.0 field, efforts to cultivate communities are also important. It is about gaining fans who will continue to support you and promote the project together. To do this, you need the ability to manage the community on Discord and the founder's ability to communicate.
It is difficult to bring a Web 3.0 project to success with the idea that you just need to spend a lot of advertising money to gather people, like in Web 2.0. However, this is just a premise. On top of that, we check whether the product you are trying to create meets someone's needs and whether you have the development capabilities to create it.
Web 3.0 startups are springing up one after another in Japan and starting to release products. What do you think about Japan's Web 3.0 projects?
Tanaka: There are projects that are expanding globally, such as Astar Network (a public blockchain founded by Sota Watanabe) and Oasys (a game-specific blockchain founded by Ryo Matsubara), but overall there are many Galapagos projects that are eyeing the Japanese market.
However, even if a business aimed at the domestic market is successful, the upper limit is lower than for a global business.
As we are a venture capital company, we find projects that aim globally more attractive. Just as companies like Sony and Toyota have been successful globally and earned foreign currency to bring back to Japan, it would be great if a Web 3.0 project originating from Japan were to succeed globally.
Is there a possibility that a Web 3.0 business with a global reach will emerge from Japan?
Tanaka: When I went to Germany and France around 2008 to meet with startups, I often found that German-centered teams were talking about "making an e-commerce site for Germany." However, about 10 years later, there were many companies with multinational teams making products for the global market.
As a result, Europe has produced many more unicorn companies than Japan, and the amount of investment is also larger. In this way, I hope that Web 3.0 projects with a global perspective will become the standard in Japan as well.
To do this, it will be important for those who will compete in the Web 3.0 world to have the ability to involve global talent.
We also support it by hosting "IVS CRYPTO," Japan's largest crypto conference that brings together Web 3.0 entrepreneurs, investors, and developers from all over the world. It will be held in Kyoto in July 2024, so please come along.
Finally, what kind of Web 3.0 projects are you looking forward to in the future?
Tanaka: I hope that people who already have a business base will seriously study the mechanisms of Web 3.0 and start new businesses. It will be difficult to achieve success with a team that has expertise in a business field but does not understand Web 3.0 well, or is only familiar with Web 3.0.
Understand what is revolutionary about Web 3.0, and combine the various technologies and mechanisms emerging in the Web 3.0 world with your own experience and knowledge. I hope that more and more people will take risks and start such businesses.
Akio Tanaka
Headline/IVC Founding Partner
Former head of venture investment in Asia at Adobe. After founding Headline Asia in 2008, he has invested in many fintech ventures, including freee, WealthNavi, and Yeahka, from an early stage in their businesses. In 2021, he also established the token fund IVC (Infinity Ventures Crypto). Headline and IVC's portfolios include Sorare, C2X, Crypto Unicorns, YGG, JPYC, Yay!, double jump.tokyo, and Oasys.
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