Miyako Capital, an affiliate of Kyoto University, has established a substantial venture capital fund with an anticipated value of around 20 billion yen ($141 million). This fund is dedicated to supporting deep-tech startups operating within the realms of cutting-edge biology and artificial intelligence.
As one of the largest initiatives of its kind in Japan, the fund is set to provide substantial backing, ranging from 500 million yen to 1 billion yen, for each individual startup. The allocation of funds will be evenly split, with half directed towards startups in the field of biology and life sciences, and the other half focused on AI and electronics. Miyako Capital aims to augment its expertise by hiring additional staff members adept at evaluating these advanced technological ventures.
A notable strategy in Miyako Capital’s approach involves collaboration with various universities across the country to identify potential investment targets. This collaborative effort highlights the intention to scout promising startups nationwide.
Approximately 50% of the total 20 billion yen capitalization is expected to originate from two state-backed entities: Japan Investment Corp. and the Organization for Small and Medium Enterprises and Regional Innovation, Japan. The remaining funds will be contributed by other prominent investors, including Japan Post Bank and Shiga Bank.
Deep tech startups, characterized by their pursuit of fundamental innovations, require sustained support and patience from investors. Miyako Capital’s commitment extends beyond financial investment, as it plans to utilize its Silicon Valley office to facilitate overseas expansion for startups.
This venture capital trend resonates with the broader landscape in Japan, as evidenced by University of Tokyo Edge Capital Partners, which launched a fund of over 30 billion yen in 2021 dedicated to deep tech investments.
Having made over 50 investments since its inception in 2013, Miyako Capital’s focus has largely revolved around startups leveraging research conducted by Kyoto University. Notably, it has achieved successful capital recovery from five of these ventures, including StemRIM, a pioneering regenerative medicine startup.
Interestingly, around 30% of Miyako Capital’s managed funds are currently allocated to research startups independent of Kyoto University’s affiliation.
The initiative aligns with Japanese Prime Minister Fumio Kishida’s vision to foster the growth of the country’s deep tech startups, as outlined in a comprehensive five-year plan announced in November. A core aspect of this endeavor involves creating a framework for startups to collaborate with established corporations, enhancing production and distribution capabilities.