JIC makes JPY 3bn LP investment in Spiral Capital Japan Fund III

Japan Investment Corporation (JIC) has decided to make an LP investment of JPY3 billion in Spiral Capital Japan Fund III (SCJ3), which is managed by Spiral Capital and invests primarily in early-stage deep tech, fintech, healthcare, smart infrastructure, AI, and other sectors.

JIC aims to stimulate a virtuous cycle of risk capital to support next-generation industries in Japan. To achieve this vision, JIC promotes open innovation as a means for supporting growth and enhancing the international competitiveness of businesses. JIC approaches these challenges by stimulating private sector investments in open innovation together with JIC’s own investment, while fostering investment professionals.

To achieve its mission, JIC invests in policy-relevant strategic business areas through LP investments in funds under JIC’s umbrella and in private funds.

JIC Investment Criteria

JIC’s investment criteria identify “Driving the creation of new businesses for Society 5.0” as one of the focus areas. The social implementation of Fourth Industrial Revolution technologies — such as AI, IoT and robotics, as well as biotechnology, drug discovery, healthcare, mobility, space, materials, electronic devices and other areas that might become internationally competitive — need a long-term and large-scale supply of risk capital.

Current Status of Investment Market

Regarding R&D and innovation in Japan, it has been pointed out that a high percentage of companies focus on incremental innovation, and that R&D in pursuit of discontinuous innovation is limited. From the perspective of creating discontinuous innovation for the realization of Society 5.0, support for startups working on deep tech is extremely important given its potentially significant contribution to resolving social issues and its need for long-term, large-scale supply of risk capital from the research and development stage through to commercialization.

Furthermore, domestic R&D and innovation tends to be self-focused, with insufficient collaboration with external organizations/institutions, including startups. To respond quickly to rapid changes in industrial structure and international competition, and to create businesses that contribute to resolving social issues, domestic companies and others will be expected to break away from their self-focused approach and engage in open innovation.

About SCJ3

As part of its ongoing efforts to foster Japanese unicorns, Spiral Capital has a policy of investing in deep tech; it plans to allocate approximately 30% of its investment in SCJ3 to this domain. JIC expects that the LP investment in SCJ3 will provide risk capital to deep-tech startups and promote the creation of new businesses and industries in this area toward the realization of Society 5.0.

Through SCJ3, Spiral Capital plans to support partnerships between its portfolio companies and domestic companies, utilizing its extensive network and database of large companies. JIC expects that the LP investment in SCJ3 will promote open innovation and the creation of new businesses through collaboration between domestic companies and portfolio company startups.

In addition, JIC intends to promote fundraising from institutional investors by providing SCJ3 with risk capital as well as support for the development of its structure.

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