Funds Startups Launches Specialized Venture Debt Fund, Targeting Deep Tech with Up to JPY 1bn per Deal
Funds Startups has marked the first close of its "All-Stage Deep Tech Debt Fund" (officially designated as Funds Venture Debt Fund - II). Operating as one of Japan's largest independent venture debt funds, the new vehicle leverages the established expertise of its predecessor to deploy sophisticated venture debt structures within the domestic market.
The fund primarily targets middle- to later-stage startups, focusing heavily on the deep tech sector while maintaining a mandate that spans various industry sectors. Under the fund's framework, individual companies can secure venture debt financing of up to 1 billion yen. Crucially, the financing is tailored dynamically to match the specific risk-return profiles characteristic of deep tech startups at each respective growth stage.
For participating limited partner (LP) financial institutions—a group that includes MUFG Bank, the Bank of Ikeda Senshu, Joyo Bank, Chugin Financial Group (Chugoku Bank), and the Bank of Fukuoka—the fund serves as a strategic collaborative platform. Funds Startups will share its proprietary venture debt expertise and credit-screening know-how, assist partners in sourcing promising startups, and provide specialized deep tech investment and lending insights.
To optimize value for startups, the firm utilizes diverse financing instruments including convertible bonds (CB) and subsidy bridging solutions, which facilitate early-stage touchpoints with emerging deep tech companies. The investment strategy aims to generate dual benefits: solving critical social challenges through comprehensive startup support, while securing stable, JPY-denominated cash flow returns inherent to a dedicated debt fund.
Norbert Gehrke
