On Wednesday, the Sony Corporation and Daiwa Capital Holdings Co., Ltd. announced that they are setting up a joint venture capital firm. The goal is to raise between $140 million and $185 million in total.
Once they reach the target sum, they plan to invest in tech companies within “key high-growth industries” in the U.S., Israel, Japan, and Europe.
Sony’s previous $100 million Sony Innovation Fund was launched in 2016 and has made over 40 investments to date.
The Innovation Growth Fund is not meant to replace Sony’s smaller investment efforts which helped seed and early-stage robotics and AI startups. Instead, Innovation Growth will enable more substantial investments in companies from similar sectors. Innovation Fund Growth will be run jointly with Daiwa Capital Holdings and should help write bigger checks than what Sony would be typically able to manage by itself.
Daiwa Capital Holdings is the VC arm of Daiwa Securities, a Japanese investment bank with the biggest securities brokerage second only to Nomura Securities. The confirmed early limited partnerships include Sumitomo Mitsui Banking Corporation, Osaka Shoko Shinkin Bank and Mitsubishi UFJ Lease & Finance Company Limited.
Sony has refused to disclose the exact amount raised so far, but the target figure has not been reached.
With Daiwa’s help, Sony aims to help its portfolio companies grow into public firms. The private equity and venture capital company’s knowledge of public listings will make all the difference. The fund should also open the path for portfolio companies to make connections with “renowned research institutions.”
“We believe that the integration of Sony’s insight of cutting-edge technologies and Daiwa Securities Group’s expertise in finance will lead to the creation of a new kind of venture capital business while providing the spark for new trends in the venture capital ecosystem,” said executive managing director of Daiwa Securities, Yoshihisa Kaneko.
Innovation Growth Ventures is expected to invest in mid-stage startups in AI, fintech, and robotics, along with other “fast-growing tech startups in other market segments.”
“Through its corporate venture capital activities to date, Sony has incubated the next generation of technologies and startups while promoting open innovation. With the establishment of this fund through IGV, we hope to accelerate open innovation while contributing to social development. Sony will support IGV’s efforts to maximize the performance of this fund, based on the experience it has cultivated through its corporate venture capital activities,” Toshimoto Mitomo, Executive Vice President, Sony Corporation, said in a statement.
Gen Tsuchikawa, Representative Director of Innovation Growth Ventures Inc., summed up the investment plans as follows, “By harnessing the various resources of Sony and Daiwa Securities Group, IGV aims to support the business growth of portfolio companies and thereby increasing investment returns. Furthermore, by supporting collaborations between the portfolio companies and third parties, including renowned research institutions and other startup companies, we also hope to contribute to the promotion of open innovation. We hope to take full advantage of the wealth of corporate venture capital experience offered by both Sony and Daiwa Securities Group.”