In conversation with Daiki Kumamoto, Global Fund Head and Growth Manager, Real Tech Holdings, Japan
Venture capital plays a major role in providing financial support to start-ups through strategic investments / mentoring to enhance growth potential. Government agencies in Asia-Pacific have also built up large funds to create new industries, with the growing number of accelerators in the region. Japan is one of the world’s largest investors in R&D and innovation, with a thriving venture capital industry. One such Tokyo-based venture capitalist, Real Tech Holdings, is driving collaboration and investment in deep tech startups in Southeast Asia. Leading investments in advanced technology sectors for healthcare, medicine, food, AI and more, Real Tech is accelerating the growth of global startups and APAC and also supporting entry into the Japanese market. Daiki Kumamoto, Global Head of Fund and Growth Manager at Real Tech Holdings, shares information on Japan’s venture capital scenario and the role of real-world technology in strengthening and bringing together startup ecosystems in Japan and Southeast Asia.
How do you describe Real Tech’s venture capital model and investment principles for the Asia-Pacific startup arena?
Real Tech Holding is a joint venture between Euglena Co. Ltd. and Leave a Nest Co., Ltd., which are Japan’s leading technology and knowledge platform companies. Real Tech Holding manages Real Tech Fund as the leading deep-tech venture capital finance company in Japan. Euglena, is Japan’s best deep tech unicorn, with a market capitalization close to $ 1 billion. Euglena focuses on biofuels, health supplements and healthy food products. Leave a Nest operates Japan’s largest academic knowledge platform that supports education, research and entrepreneurship. Facilitating collaborations between researchers and society to advance science and technology, Leave a Nest also manages a global seed acceleration program specialized in deep technologies called “Tech Planter”, including 6 ASEAN countries, with more than 600 applications per year and also supports startups with their R&D, prototyping and manufacturing.
How do you map the investment opportunities in APAC according to RealTech’s expertise?
Real Tech Fund started funding R&D-based technologies in 2015 with the expertise of Euglena and the Leave a Nest platform. Our areas of investment vary from life sciences, aerospace, robotics, agriculture, medical devices, marine technologies, electronics, energy and new materials. We have over 50 well-known business collaborations in the form of a Limited Partnership (LP) with a total investment of $ 200 million (JPY 22.8 billion).
With the initial investment of $ 82 million (JPY 9.4 billion) in early stage Japanese startups, we have decided to expand our business in the ASEAN region. Southeast Asia, with a total population of over 650 million, struggles with persistent unresolved issues such as plastic pollution, loss of biodiversity, agricultural waste, poor medical environment, etc. These concerns require immediate attention with appropriate investment policies and support.
The IT startup market has emerged over the past 10 years, but there are no deep-tech startups in the Southeast Asia region that are valued over $ 100 million. This could be mainly due to; Lack of investors with in-depth knowledge of technology investments and Lack of prototyping / manufacturing capacity to support the growth of high-tech startups despite the unique research themes emerging at universities and research institutes across Asia. South East.
Can you explain the role of the Real Tech ‘Global funds support system in creating a platform to enter the Japanese market and collaborate with regional companies?
The Real Tech Global Fund was launched with a $ 30 million (JPY 2.9 billion) investment in high-tech startups, primarily in Southeast Asia, to connect Japan and the SEA ecosystem. We seek to connect startups to the Japanese ecosystem for meaningful R&D / commercial collaboration with companies, groups of factories and researchers. Real Tech helps various experts in the field to provide hands-on support to startup portfolios to accelerate their business potential in the burgeoning deep tech industry.
Regarding incubation, our group company manages an incubation space called Center of Garage (CoG) in Tokyo, which presents itself as a unique incubation place where deeptech startups, Japanese “super factories” and big companies come together. Real Tech helps accelerate innovations in the global high-tech startup space. Interactions between different stakeholders allow participants to experience the Renaissance of Japanese “Monozukuri”. This activity solves manufacturing challenges around the world by providing innovative solutions. Many of our current global portfolios are also looking to use CoG as their primary office to enter the Japanese market.
How is real technology boosting investments in the high tech health sector in Southeast Asia?
Real Tech has formed strong partnerships with government institutes in various countries. In 2021, we were named as one of 13 Co-Investment Partners in Deep-Tech for Capital SEEDs of the Singapore Government-backed VC arm (Asia’s most active venture capitalists Southeast). As a catalyst for Singapore’s high-tech ecosystem, SEEDS Capital partners with institutional co-investors around the world to support innovative Singapore-based startups that possess groundbreaking intellectual content and global market potential. With the latest appointment of co-investors, SEEDS Capital has broadened, diversified and updated its current pool of partners in the three advanced technology sectors, (i) Manufacturing, Commerce and Connectivity; (ii) Human health and potential; and (iii) Urban solutions and sustainability. Real Tech is the first Japan-based VC to be named in the Deep Tech area. With this, we are looking to make our first co-investment to bridge the gap between the ecosystems of Singaporean and Japanese startups.
With Singapore, we have also formed a partnership with the Malaysian government through Malaysian Technology Development Corporation Sdn. Bhd. (MTDC), which has joined the Global Fund as a new limited investment partner. MTDC is a subsidiary of the Malaysian Ministry of Science, Technology and Innovation. Its mission is to support the commercial implementation of technology in Malaysia through finance and investment, incubation and mentoring, entrepreneurship development and relevant advisory services. Currently, MTDC has actively invested in over 700 companies, mainly startups through different specialist funds and has recently focused on deep tech sectors by partnering with various experienced strategic partners. Real Tech is the first Japan-based VC to partner with MTDC as an LP investor for co-investments and co-acceleration in Malaysia.
How do you sum up Real Tech’s visions to strengthen the competitiveness in the Japanese advanced technology market in order to accelerate the expansion of domestic and foreign companies?
Investing in deep technology must be sustainable. To date, we have invested in 54 startups in Japan and 5 startups in ASEAN, of which more than 30% are to be categorized in the biotechnology, medical technologies and health sector. We see huge potential in the region but have been able to invest mainly in Singapore.
Real Tech’s recent venture capital assistance involves various biotechnology and food science companies across Southeast Asia. One of them is Austrianova, based in Singapore and Thailand (an exclusive technology platform encapsulating cells from living mammals and bacteria) with which we have partnered as part of our “Enter to Japan Market Program”. “. Leave a Nest Singapore, jointly organized with Enterprise Singapore (ES). Through our investment, we are accelerating collaboration with Japanese trading companies to support application expansion and social implementation of Austrian encapsulation technology, primarily for our LPs.
Likewise, NDR Medical Technology Pte Ltd, a Singapore-based medical device company, is also assisted by Real Tech to enter the Japanese market. This strategic partnership will accelerate collaboration with companies, factories and research institutes in Japan. Real Tech has extended its financial support to other technology portfolios such as QD Laser (high tech vision care), Amelieff (bioinformatics analysis systems for medical / biotechnology research, clinical trials and drug discovery) , Shiok Meats (Cell Based Seafood) and more to Add.
We have also forged a strategic alliance with the leading Japanese law firm with significant deep technology expertise to provide the best deep technology legal support in Japan, which aligns IP strategy commercially and financially. . Real Tech’s legal counsel and partners in South East Asia cover the entire region and provide a framework for global IP filing / procurement for our portfolio. Additionally, Real Tech looks forward to partnering and expanding global collaborations beyond Asia-Pacific to find great teams in biotechnology, medical technology, and healthcare to change the world. together.
Hihaishi C Bhaskar