[NEWS] SBI establishes 100 billion yen fund for Web 3.0 startups

On the 9th, SBI Holdings announced that it will start operating the "SBI Digital Space Fund (SBI Venture Fund 2023 Investment Limited Partnership)" fund, which will invest in startup companies in fields such as Web 3.0, fintech, and AI, by the end of the year.

The amount is said to be around 100 billion yen. The purpose is to support the development of Web 3.0 startups, which are lagging behind in Japan, and contribute to Japan's evolution into the Web 3.0 field. The aim of launching the fund is to provide growth capital to Web 3.0 startups and promote Web 3.0 technology in Japan.

Sumitomo Mitsui Banking Corporation, Mizuho Bank, Nippon Life Insurance, Daiwa Securities Group Holdings, and others have already decided to invest a total of over 50 billion yen. It is said that the fund plans to raise funds of around 100 billion yen by June next year. The selection of companies to invest in has begun, and it is expected to total 150 to 200 companies.

In addition to new technologies such as Web 3.0 and the metaverse, SBI will invest in startup companies in the AI ​​and healthcare fields, which it has focused on so far. The investment amount per case is expected to be several hundred million to several billion yen, and investments will be made within 2 to 3 years from the start of the fund.

SBI Investment is responsible for managing the fund. To date, it has established venture funds with a total of over 700 billion yen, and the "SBI 4 + 5 Fund" established in 2020 had a committed investment amount of 100 billion yen. There are almost no venture capital funds of 100 billion yen in Japan.

An SBI representative said, "To nurture startup companies that can compete on the world stage, it is essential to have a financially strong donor." Through funds in the new Web 3.0 field, the fund will support the growth of companies immediately after their founding.

▶︎Main investors in the fund

Funding startups is a challenge for the whole of Japan

New technologies such as generative AI, represented by ChatGPT, are being developed one after another around the world. Japan is currently being left behind by the world in the Web 3.0 field.

Funding startups is also a challenge for the whole of Japan. According to the Japan Venture Capital Association (JVCA), startups have raised $198.4 billion (approximately 30 trillion yen) in the United States, $46.6 billion (approximately 7 trillion yen) in China, and just $6.6 billion (approximately 100 million yen) in Japan, which is only one-thirtieth of the amount in the United States.

This creates a difficult situation in which companies cannot grow even in growing industries.

Small IPOs, which are IPOs that are conducted before reaching a size that would attract investment from institutional investors, are also a problem. As of June last year, there were more than 500 unicorn companies in the United States that are unlisted but have a corporate value of over $1 billion, but in Japan there were less than 10.

The background to this is the lack of investors who are willing to invest in startups in the growth phase, and there are countless examples of companies that would have grown enormously if they had just received a little more funding.

Many startups in the Web 3.0 field are struggling with a lack of funds, so the launch of this fund is good news for startups.

Reference:Announcement,Nihon Keizai Shimbun
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