Tokyo-based venture capital firm Coral Capital, formerly known as 500 Startups Japan, announced that it has reached the final close of its latest venture fund at $128 million.
The new fund – Coral Capital III – will continue to invest in seed and early-stage companies in Japan. The vehicle, which will have a longer life, will focus on larger seed investments and follow on, the firm said.
The vehicle’s limited partners include Mizuho Bank, Mitsubishi Estate, Shinsei Bank, Pavilion Capital, founders Fund, Dai-ichi Life Insurance, GREE, and other international institutional investors.
About 30% of the commitments to the latest fund come from global investors, including Founders Fund, the US-based VC investor founded by Paypal co-founder Peter Thiel, the company said.
Through the fund, Coral Capital will be deploying first checks of anywhere from $500,000 all the way to $5 million, making it one of the largest seed to early-stage players in Japan. The fund’s life can also be extended to 14 years.
In a post on Coral Capital’s website, founding partner and CEO James Riney said they have also allocated a significant portion of the fund for follow-on investment.
“Over the years, we’ve made a few large follow-on investments into our top companies, ultimately investing about $20 million into SmartHR and $17 million into Graffer. We plant to make similar high conviction bets out of this new fund,” Riney said.
The first and final close of Coral Capital III less than three years after the VC firm raised $45 million for Capital Fund II when it rebranded from 500 Startups Japan. The firm launched its first fund at $30 million in partnership with 500 Startups. The team went independent in March 2019.
The latest vehicle brings Coral Capital’s total assets under management close to $300 million. Since its inception, the firm said it has invested in over 80 companies, including SmartHR, Kakehashi, Logiless, Kaminashi, Graffer, and Pocket Concierge, which was acquired by American Express.
The close of the latest fund also comes at a time when annual startup investment in Japan is at about $5 billion, with the country hosting six unicorns, according to Riney.
“With that said, when you consider the size of the economy, Japan still has a long way to go… Coral will continue to play an important role in driving this ecosystem forward, much like we have over the last five years,” he added.