Incubate Fund, a Tokyo-based venture capital company, on Wednesday, said it has completed the first close of its third India-focused fund targeting to raise $50 million to invest in new as well as existing portfolio companies.
The Japanese fund, which set up a dedicated India fund in 2016, has invested in 27 companies in the country, including Captain Fresh, Yulu, ShopKirana, and Plum. It invests in the range of $500,000 to $1.5 million in B2B, B2C, supply-chain, and consumer tech startups operating across both tier 1 and tier 2 markets.
ShopKirana was its first investment in India in 2016.
The firm, which has rebranded from Incubate Fund India to Incubate Fund Asia, launched its second India fund of $18 million in 2019. With its third fund, the firm aims to build a portfolio of around 20 startups. It will invest only 40% of its total investible corpus to create the portfolio and use the balance to back existing companies in its portfolio.
Incubate Fund Group has offices in locations including Tokyo, Singapore, Bangalore, Mumbai, São Paulo, and Mountain View.
The fund’s plans to invest in India come at a time when many small and large investors have taken a step back from late-stage deals to invest in early-stage startups in the face of macroeconomic headwinds and a sharp fall in the value of their listed portfolio entities amid a market selldown.
Other big Japanese banks have also started promoting fintech businesses in Asia. Mitsubishi UFJ Financial Group is operating a fund for investment in fintech and other startups in Asia, while Mizuho Financial Group decided in March to invest in a company offering “buy now, pay later” services in Indonesia.
Earlier this year, another Japanese early-stage venture capital fund, JAFCO Asia, told DealStreetAsia that it aims to deploy $15-20 million in South Asia this year, with a firm focus on India.