Incubate Fund Establishes JPY 30bn Growth Fund "IF Growth"
Incubate Fund has established "IF Growth," a fund specialized in growth capital, and completed its first close. The final fund size is planned to be 30 billion yen.
In parallel, the fund specialized in seed stage investments has also completed its final close at a total of 20.5 billion yen including related funds.
1. Growth Capital Specialized Fund "IF Growth"
Background
Recently, against the backdrop of advancing public market reforms and increasing demand for M&A and secondary transactions, the capital environment surrounding startups is at a major turning point. However, players capable of providing continuous capital supply to private growth-stage companies, which is essential for steadily converting these changes into growth, remain limited domestically.
To address these challenges, Incubate Fund has established "IF Growth No. 1 Investment Limited Partnership" to leverage the entrepreneurial support expertise built consistently as a seed-focused fund since its founding in 2010, present new options for capital circulation in private growth markets, and support sustainable growth of Japan-originated startups.
This fund has been selected as an operating entity for the "Public-Private Partnership Impact Growth Fund" managed by Tokyo Metropolitan Government's Startup Strategy Promotion Headquarters and established with investment from Tokyo Metropolitan Government.
Market Environment
On April 22, 2025, the Tokyo Stock Exchange announced its "Future Responses for the Growth Market" as a review of listing maintenance standards for the TSE Growth Market. This policy clarified the corporate profile that can become investment targets for institutional investors and established a direction that places greater emphasis on liquidity, growth potential, and earnings quality.
Incubate Fund welcomes this move as a positive reform that strengthens the mechanism for selecting and supporting startups that lead industries.
Incubate Fund strongly recognizes that what is required in the domestic startup market going forward is growth capital that steadily supports growth during the private period and flexible capital liquidity. Incubate Fund has established this fund to help lead such market evolution.
Team
Incubate Fund has previously focused on building frameworks to launch businesses from zero together with entrepreneurs as a venture capital specialized in the founding stage.
For this fund formation, to establish equity stories for realizing continuous growth of companies before and after listing and strengthen systems for strategic dialogue with capital markets, Incubate Fund has recruited Masashi Ihara, who has been engaged in investment banking for many years, as a dedicated General Partner for this fund.
Incubate Fund will continue external recruitment of personnel with expertise that contributes to the operation of this fund. Additionally, with "IF Growth" as the starting point, Incubate Fund aims for value co-creation across the entire ecosystem by building systems in collaboration with diverse stakeholders.
Investment Strategy
Incubate Fund will make selective investments in domestic startups that contribute to maximizing corporate value before and after listing through growth capital and liquidity provision in the following three areas:
- Deep Tech
Advanced technology themes with high public interest and public nature that are increasing in national strategic importance due to geopolitical backgrounds - Creative Industry
Themes that enable creation of new culture by creating new IP or maximizing the value of existing domestic IP - Business Solution
Digital solutions that contribute to productivity improvement across domestic industries, and themes that bring major industry transformation through M&A or addition/evolution of business models
2. Seed Stage Specialized Fund
For the seed stage specialized fund, Incubate Fund has completed the final close of "IncubateFund VI L.P.," the sixth fund, together with related funds for a total of approximately 20.5 billion yen. Since its founding in 2010, Incubate Fund has consistently executed investments in early-stage startups with the investment philosophy of "Zero to Impact" and "First Round, Lead Position, Build Industries." Based on the investment style established to date, this fund will invest with the following four areas as priority investment domains:
- Japan to Global
Investment in Deep Tech, Entertainment, and Consumer Services that are globally competitive - Green Innovation
Investment in Japan-originated decarbonization, power saving, and regenerative technologies - National Security Tech
Investment in technologies related to national/economic security in anticipation of supply chain transformation accompanying the materialization of geopolitical risks - Large Domestic Digital/AI Transformation
Investment in DX opportunities for major domestic industries and utilization opportunities for LLM and Generative AI
