Coral Capital, a Tokyo-based venture capital firm, today announced the closure of its third fund, Coral Capital III, raising $ 128 million (14 billion yen). Coral Capital’s total assets under management (AUM) now stands at $ 275 million.
Limited vehicle partners include Mizuho Bank, Mitsubishi Estate, Shinsei Bank, Pavilion Capital, Founders Found, Dai-ichi Life Insurance, GREE, and undisclosed domestic and international institutional investors.
Coral Capital, founded by two partners James Riney and Yohei Sawayama, will continue to invest in seed and start-up companies in Japan, deploying initial checks of $ 500,000 to $ 5 million, and follow-on funding, has CEO and Founding Partner Riney told TechCrunch.
“We made some big follow-on investments – $ 20 million in SmartHR and $ 17 million in Graffer. we have also allocated a significant portion of our last fund to follow-on investments, ”said Riney. About 30% of its third fund comes from global investors including the United States, Asia and Europe, and Coral Capital wants to be a bridge between its Japan-based portfolio companies and the global venture capital community. to reach an international scale, continued Riney.
What makes the latest fund unique is that it has a longer lifespan that can be extended to 14 years, Riney said. “We want our founders to focus on building without the pressure of a VC looking for a quick exit,” Riney told TechCrunch. Its previous two funds had a lifespan of around 10 years, Riney noted.
Riney and Sawayama, co-founders of 500 Startups Japan, launched their first fund in partnership with 500 Startups in February 2016. Coral Capital created its second $ 45 million fund, Capital Fund II under their own brand, in February 2019 .
Coral Capital has invested in more than 80 companies in Japan and has left 7 companies to date, according to Riney. He has made numerous investments, including SmartHR, Graffer, GITAI and Kyoto Fusioneering.
The company will focus on investing in digital transformation in areas such as SaaS, insurance, fintech, healthcare, deep tech, fusion engineering companies, robotics companies, said Riney. at TechCrunch.
The Japanese startup ecosystem is in full swing now compared to 9 years ago, Riney said. While Riney and Sawayama began investing in start-ups and startups in 2012, the startup world was a black box in the country, according to Riney. There was less than a billion invested in startups each year and almost no unicorns in Japan, and there was not enough information available in Japanese on construction companies, he said.
Many startups in Japan are now forgoing an early IPO and raising larger amounts in later cycles, Riney said.
Japan’s annual startup investment is estimated at $ 5 billion, with six unicorns, including the holding company of Coral Capital, up from around $ 600 million in 2012. The $ 5 billion annual startup investment does not are nothing when you consider that the United States and China attract tens of billions, and even neighboring Korea attracts around $ 4 billion and produced Coupang, a decacorn, Riney said. “We can do better, and we will,” and Coral Capital will continue to support and play an important role in promoting the ecosystem in Japan, added Riney.
Coral Capital also plans to double its media, Coral Insights, and recruit staff to develop its community. Many startup founders, employees and investors are posting content about their learnings, raising the bar for everyone in the ecosystem and Japan is starting to look a lot more like Silicon Valley, Riney said.