venture capital

SMBC Secures Strategic Stake in Carbon Removal Developer Deep Sky to Drive Japanese DAC Market

Sumitomo Mitsui Banking Corporation (SMBC) has completed a strategic investment in Montreal-based carbon removal project developer Deep Sky Corporation to accelerate the deployment of climate technologies in Japan. The financial terms of the transaction were not disclosed.

Deep Sky operates as a tech-agnostic project developer focused on extracting atmospheric carbon dioxide for permanent underground storage. Led by CEO Alexandra Petre, the firm has raised $130 million in funding to date, backed by a roster of institutional investors including Investissement Québec, Brightspark Ventures, Whitecap Venture Partners, OMERS Ventures, BDC Climate Fund, Breakthrough Energy Catalyst, BMO, and the National Bank of Canada.

Transaction Mechanics and Background

Funding Source: The investment was executed under SMBC's dedicated Social Value Creation Investment Fund.
Preceding Agreement: This transaction builds directly upon an established strategic partnership initiated under a memorandum of understanding (MoU) signed by both entities on December 3, 2025.
Geopolitical Context: The agreement was finalized in Tokyo alongside the Honourable Maninder Sidhu, Canada's Minister of International Trade, as an official component of the Team Canada Trade Mission to Japan.

Strategic Objectives

Through this capital injection, SMBC intends to leverage Deep Sky’s operational expertise in Direct Air Capture (DAC) project development, carbon dioxide storage, and credit generation. The bank aims to:

Advance Sourcing Capabilities: Assist corporate clients in securing high-quality, DAC-based carbon removal credits to address residual emissions.
Build Market Infrastructure: Foster commercial collaboration between Japanese corporate buyers and global project developers to commercialize the regional carbon dioxide removal (CDR) sector.

According to Kenji Irie, Executive Officer and General Manager of SMBC’s Sustainability Planning Department, the commercial insights gained regarding technology deployment and credit generation will be utilized to enhance the bank's broader carbon removal advisory and ecosystem support. Minister Sidhu further noted that the venture highlights a strengthening Canada-Japan clean technology corridor, positioning Canadian-developed climate solutions for international commercial scaling.

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Japan FinTech Observer #169

Welcome to the one hundred sixty-ninth edition of the Japan FinTech Observer. This week, we are excited to have new subscribers join us from the Université de Tunis, Alpha Bank, the Central Bank of the Russian Federation (Bank of Russia), SBI Holdings USA, Inc., and SMBC Group, among others

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