SIP Global Partners announces first close of its $150M fund to bring U.S. startups into Japan – TechCrunch

Japan is often discussed as an expansion target for American startups, but over the years it has become a top market for companies such as Slack, Salesforce, Twitter and, more recently, Clubhouse. today SIP Global Partners Is announcing new funds to invest in early-stage US startups that have the potential to expand to Japan and possibly other Asian markets as well. The fund has already raised about $ 75 million of its $ 150 million goal, and has already invested in five companies.

SIP’s new fund seed will monitor seed late for B-stage companies that have a product, or one to come on the market, ready to expand internationally. The team will work closely with portfolio companies, enabling them to start operations in Japan and other Asian markets.

Managing partner Justin Turkat told TechCrunch that Japan is a promising market for foreign startups partly because an undercapitalized venture capital ecosystem means a small pool of entrepreneurs, including many of the nation’s top tech talent concommuters or government Got the option to join.

While Japan’s startup market holds a lot of potential, he said, it is still nascent. On the other hand, Japan is now the largest source Foreign direct foreign investment in the world, And with nearly 125 million consumers and large corporations needing scalable solutions, it is a mature market for new technology.

“If you look at what has happened over the years, I think Japan looks forward to doing business with US startups that I’ve never seen before, and we think a lot of tailwinds around it Turkat said, “You look at investments and partnerships with American startups, it’s at a record level in the last five years and deal counts are increasing every year.”

The fund is being launched by four investors based in the US and Japan. Turkat, a former director of the Japan Venture Capital Association, and founder and managing partner Shigeki Sethoh, are in Tokyo, while general partner Jeffrey Smith and founder and managing partner Matthew Solay are in Boston and New York, respectively.

“We have really started doing this with the team,” he said. Turkat said, we have dedicated our careers to cross-border, both as operators and investors, in the US and Asia. “On average all four partners have more than 20 years of experience doing so.”

Over the past few years, he has seen the global expansion happening earlier in the life of a startup, he said. “I think it used to be an axiom that if you’re a US startup and you’re venture-backed, you’re not thinking of expanding overseas until your Series D round,” but companies are now overseas. Their seeds are rounding the markets as soon as possible.

The new fund of SIP is looking for startups in three areas: creativity (augmented and extended reality, synthetic media and web-based platforms), productivity (artificial intelligence and machine learning, edge computing, Internet of Things and semiconductors) and security ( Digital health) and information security).

Turkat said it is focusing on companies that provide the main infrastructure or economic layer for emerging technology.

For example, “At the infrastructure layer, we’re seeing 5G rolled together globally, then edge computing, semiconductors, security and AI and machine learning, all around this infrastructure layer,” he said . Companies in the fund’s current portfolio that fit into this category include OpenRAN startup Parallel Wireless and Croquet, an ultra-low latency collaboration platform.

Turkat said, “Then you have an economic layer with all these advances, platforms and applications sitting on top of it.” This includes the fund’s three other investments so far: Fable, a browser-based motion design platform, Tilt Five, an AR gaming platform, and Kinetic, an industrial IoT startup focused on workplace safety.

As a strategic investor, SIP works closely with startups as they expand into new countries. This includes hiring talent and initial business partners, including distribution channels or potential joint ventures. After Japan, SIP also helps startups enter other Asian markets, especially in ASEAN, which include Thailand, Vietnam and Indonesia.