Government-backed Cool Japan Fund is now the largest LP in Silicon Valley-based 500 Startups

Government-backed Cool Japan Fund announced that it is going to contribute US$10 million into the Japan-focussed fund of 500 Startups, according to a Bloomberg report.

The investment brings total capital raised for the sector and stage-agnostic fund to US$35 million, exceeding the initial target of US$30 million when it was announced in September 2015.

Founded in 2013, Cool Japan Fund invests in companies that promote Japanese culture such as TV channel operator WakuWaku Japan and cafe chain Green Tea World USA.

The Japan government provides about 85 per cent of its US$630 million fund, and Cool Japan Fund now the largest limited partner in 500 Startups’ Japan-focussed fund.

Their investment also broke the record for being the first made by the government into a foreign venture capital firm.

Also Read: I like founders who can sell: 500 Startups Japan’s James Riney

The goal of the investment is to help local startups expand globally through the 500 Startups network in 60 countries.

The fund itself has already invested “about a quarter” into more than 20 startups, such as space communications startup Infostellar and high-tech wheelchair startup Whill.

Compared to neighbouring country China, Japan is slightly behind when it comes to venture activity.

A KPMG report said that startup funding in China has climbed from US$3 billion in 2013 to US$31 billion in the next three years.

Meanwhile, another report by Japan Venture Research Co stated that startup funding in the country only reached JPY210 billion (US$1.9 billion) in 2016.

According to 500 Startups Japan head James Riney, foreign venture firms can help change a culture dominated by corporate funding in the market, where 72 per cent of venture funding in 2016 are provided by them.

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