SBI Holdings, a leading financial company in Japan, is gearing up to introduce a substantial fund of $663 million to support the growth and development of Web3, AI, and other fintech startups. This ambitious initiative aims to invest in 150-200 companies and is expected to commence operations by the end of this year.
A Boost for the Startup Ecosystem
The investment scale of SBI Holdings is set to be robust, with projects receiving funding ranging from hundreds of millions to billions of yen. The fund itself is projected to reach an impressive 100 billion yen. To make this endeavor a reality, significant contributions have already been secured from well-established financial institutions, including Sumitomo Mitsui Banking Corporation, Mizuho Bank, Nippon Life Insurance, and Daiwa Securities Group. These institutions have committed to investing over 50 billion yen into the fund.
This injection of financial support is noteworthy in Japan, where venture capital funds of this magnitude are relatively scarce. The Japanese startup ecosystem has long faced challenges in nurturing and fostering the growth of new businesses. In response to this concern, the Kishida administration unveiled a comprehensive “5-year startup development plan” in November 2022. This plan aims to address the lagging startup rates in comparison to the United States and Europe and positions Japan as a thriving hub for startups in Asia.
The Kishida administration strongly believes in the concept of “new capitalism” and sees startup companies as the embodiment of this innovative mindset. Startups have the potential to tackle societal challenges and transform them into catalysts for growth, ultimately leading to the establishment of a sustainable economic society. To realize this vision, the Japanese government has set an ambitious goal of significantly increasing investment in startup companies. The aim is to grow the investment from 800 billion yen in 2022 to a staggering 10 trillion yen (approximately $66 billion) by 2027.
To achieve this growth, collaborative efforts between the public and private sectors are crucial. The government has also expressed its commitment to nurturing the development of 100 unicorns and 100,000 startup companies. The strategic initiative strives to position Japan as a flourishing global startup hub and solidify its position as Asia’s largest startup ecosystem.
As the landscape for Web3 and AI startups continues to evolve, regulatory challenges and tax policies become critical considerations. To tackle these issues, the Japanese government is in the process of revising the tax framework specifically focused on Web3 companies, particularly in regards to corporate taxes and virtual currencies. The final outline of the proposed tax reform is expected to be confirmed around mid-December.
SBI Holdings’ announcement of a $663 million fund for Web3 and AI startups marks a significant milestone in Japan’s journey to strengthen its startup ecosystem. With contributions from prominent financial institutions, this ambitious initiative aims to fuel the growth of 150-200 companies. As the government works towards its goal of fostering 100 unicorns and 100,000 startup companies, it is also addressing regulatory challenges and tax policies to create a conducive environment for innovation and entrepreneurial success. The future appears promising for Japan as it strives to position itself as a thriving global startup hub in the fast-evolving domains of Web3 and AI.