Imagine immersing yourself in the world of deep tech startups, where cutting-edge innovations in fields like robotics and biotech are transforming industries. That’s exactly where Japanese venture capital firm, Beyond Next Ventures, finds itself as it raises an impressive $67.7 million for its deep tech fund. With a target of $168 million for its third fund, Beyond Next Ventures aims to support up to 25 companies through seed, Series A, and later-stage investment rounds. By increasing later-stage funding, the firm hopes to help Japanese startups expand globally and boost their valuations. Beyond Next Ventures’ commitment to backing disruptive technologies exemplifies their belief in the power of deep tech to shape our future.
Japanese VC Beyond Next Ventures raises $67.7M in a first close of its deep tech fund
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Overview of Beyond Next Ventures
Beyond Next Ventures, a Tokyo-based venture capital firm, recently completed the first close of its third fund, BNV Fund 3, raising ¥10 billion (approximately $67.7 million). The firm aims to raise up to ¥25 billion (about $168 million) by March 2024 to invest in deep tech startups, particularly in the fields of robotics and biotech. With a focus on early-stage Asian startups, Beyond Next Ventures plans to use the fund to support around 25 companies through seed, Series A, and later-stage rounds.
First close of ¥10 billion for BNV Fund 3
The first close of ¥10 billion marks a significant milestone for Beyond Next Ventures, as it kicks off the fundraising for BNV Fund 3. The firm is optimistic about the potential of deep tech startups and their contribution to technological advancements. By providing early-stage funding, Beyond Next Ventures aims to support innovative startups in their development and growth.
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Investment focus on deep tech startups in robotics and biotech
Beyond Next Ventures has a specific investment focus on deep tech startups operating in the fields of robotics and biotech. These startups are at the cutting edge of technological advancements and have the potential to revolutionize industries. Through its investment in these startups, Beyond Next Ventures aims to contribute to the growth of deep tech innovation and support the emergence of breakthrough solutions.
Fund closure target and investment plans
Beyond Next Ventures aims to close BNV Fund 3 by March 2024, with a target of ¥25 billion (about $168 million). This fund will be utilized to invest in approximately 25 deep tech startups, providing them with the necessary funding for their development and growth. The investments will cover all stages, from seed funding to later-stage rounds, including Series A. By supporting startups at various stages, Beyond Next Ventures aims to foster a vibrant deep tech ecosystem.
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Check size and increased funding limit
The check size per investment from Beyond Next Ventures ranges between $670,000 and $2 million, with a maximum limit of up to $13 million across multiple rounds per company. This represents a significant increase in the funding limit compared to the previous funds. By increasing the funding limit, Beyond Next Ventures aims to provide startups with the financial support they need to scale their operations and achieve their growth objectives.
Lack of later-stage funding in Japan
One of the challenges faced by startups in Japan is the limited availability of later-stage funding. According to a 2021 report by the World Bank, the volume of later-stage investments in Japan lags behind that of Europe, North America, and other countries. This lack of funding opportunities poses a constraint on startups’ ability to expand globally and negatively impacts their valuations.
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Reasons behind the lack of later-stage funding
Several factors contribute to the lack of later-stage funding in Japan. One main reason is that institutional investors and limited partners have only recently started actively participating in VC investments. As a result, the size of VC funds in the country has been relatively small, leading many VCs to focus on seed and early-stage startups. Additionally, the Tokyo Stock Exchange Growth Market allows companies with a market capitalization of several billion yen to go public at an early stage, which incentivizes startups to forgo later-stage funding opportunities.
Increasing later-stage and follow-on investments
To address the lack of later-stage funding, Beyond Next Ventures intends to increase its investments in later-stage rounds, such as Series C and Series D. Additionally, the firm plans to make additional follow-on investments through its latest fund. By providing continuous financial support at later stages, Beyond Next Ventures aims to enable startups to explore growth opportunities and delay going public, allowing them to reach their full potential.
Extended operational period of the fund
Beyond Next Ventures plans to extend the operational period of BNV Fund 3 to 11 years, one year longer than the previous fund. This extension will provide startups with a longer runway for growth and development. Furthermore, with the consent of limited partners, the fund’s operational period can be extended for up to three more years. This flexibility ensures that startups receive ongoing support and financial backing for an extended period.
Focus on deep tech startups from universities and research institutions
Beyond Next Ventures has a strategic focus on deep tech startups emerging from universities and research institutions. These startups often require specialized entrepreneurial strategies to effectively commercialize their innovative technologies and scientific inventions. Beyond Next Ventures facilitates this process by connecting research teams with more than 3,000 business and management experts, enabling startups to bridge the gap between research and commercialization.
Partners and investors of BNV Fund 3
The limited partners of BNV Fund 3 include existing backers such as the Organization for Small and Medium Enterprises and Regional Innovation, MUFG Bank, Dai-ichi Life Holdings, and Tokyo Century. Additionally, new investors, including SMBC Nikko Securities, Mitsubishi UFJ Trust and Banking, and FFG Venture Business Partners, have also joined the fund. The support of these partners and investors is crucial in providing startups with the necessary financial resources and expertise to thrive.
Expansion of operations in India
In 2020, Beyond Next Ventures opened a regional office in India, recognizing the growing opportunities in the Indian startup market. The firm sees India as an attractive medium- to long-term business expansion destination for Japanese portfolios. With the startup market in India experiencing remarkable growth, Beyond Next Ventures aims to leverage this trend to further expand its operations and support innovative startups in the region.
History of Beyond Next Ventures and previous funds
Beyond Next Ventures was founded in 2015 and has since established two previous funds. The first fund, launched in 2015, had a size of $37 million, while the second fund, launched in 2019, had a size of $111 million. Over the years, Beyond Next Ventures has invested in nearly 80 healthcare, agri-food, and deep tech companies in Japan and India. Some of its successful exits include initial public offerings and mergers and acquisitions, showcasing the firm’s ability to support startups in their growth and development.
Success stories of Beyond Next Ventures portfolios in healthcare and deep tech sector
Beyond Next Ventures has achieved success in its investments in the healthcare and deep tech sector. One notable portfolio company, CureApp, raised approximately ¥7 billion ($47 million) from Carlyle last year. CureApp has developed a therapeutics app that allows users to receive medical device approval and insurance reimbursement. Another successful portfolio company is Susmed, the first Japanese IPO in the digital healthcare sector. Susmed has developed a therapeutic app for patients with insomnia. These success stories highlight the impact of Beyond Next Ventures’ investments in driving innovation and revolutionizing industries.
Bullish outlook on Japan’s startup scene
Despite the uncertainties in the economy, several investors remain bullish about Japan’s startup scene. The growth of the startup ecosystem, coupled with increasing investments in later-stage rounds, indicates a positive trajectory for the Japanese startup landscape. Beyond Next Ventures’ commitment to supporting deep tech startups and its bullish outlook on the market demonstrate its confidence in the potential for innovation and growth in Japan.
In conclusion, Beyond Next Ventures’ first close of ¥10 billion for BNV Fund 3 represents a significant milestone in its pursuit of supporting deep tech startups. With a focus on robotics and biotech, the firm aims to provide startups with the necessary funding and expertise to thrive. By addressing the lack of later-stage funding, extending the fund’s operational period, and expanding its operations in India, Beyond Next Ventures aims to foster innovation, drive growth, and contribute to the success of startups in Japan and beyond.