Nomura Joins With Oldest Japan University to Invest in Startups

  • Keio University and brokerage seek to raise 10 billion yen
  • Gree co-founder says talent and money are flowing to ventures

Japan’s quest to gain ground in venture capitalism has brought together its oldest university and biggest brokerage.

Keio University and Nomura Holdings Inc. are teaming up to raise 10 billion yen ($84 million) over the next 10 years to invest in startups, said Kotaro Yamagishi, chief executive officer of a joint venture that’s running the project. Keio Innovation Initiative Inc., formed in December, began seeking investments on Jan. 25 and aims to raise 3 billion yen in the first round of fundraising, Yamagishi said in an interview.

Prime Minister Shinzo Abe has been trying to increase investment in startups as part of his strategy to spark innovation and revive the world’s third-largest economy. The tie-up between Keio and Nomura is the first between a Japanese university and investment bank and comes at a time when academia’s role in venture capitalism is rising.

“Talent and money are flowing into these ventures and they have better infrastructure now, which makes their chances for success better than ever,” said Yamagishi, 39, a co-founder and director of mobile-game company Gree Inc.

Space Technology

The funds raised by Keio and Nomura will invest in 15 to 20 startups that could create new business in areas such as life science, regenerative medicine and space technology over the next five years. Keio Innovation will talk with Japan’s biggest banks, regional lenders and information technology companies, Yamagishi said. Keio, Nomura and Yamagishi may also inject money, he added.

The application of research by universities will be significant to “create new industries that play a key role in Japan’s future,” said Kenji Yamashita, a spokesman for Tokyo-based Nomura. He declined to comment on the firm’s investment plan.

Nomura, the top-ranked underwriter of initial public offerings in Japan last year, will help Keio Innovation find investment targets and develop exit scenarios including IPOs and mergers, said Yamagishi, who graduated from Keio in 1999 and helped form Gree five years later. Nomura doesn’t have exclusive rights to underwrite share sales or advise on them under the agreement, he added.

Spider Silk

Keio, a private university founded in 1858, has stakes in 13 companies, including already-listed V-cube Inc., Human Metabolome Technologies Inc. and SanBio Co. The university also invested in Spiber Inc., a Yamagata-based biotechnology research and development firm formed in 2007 by three Keio graduates including Kazuhide Sekiyama, 33.

Spiber is considering an IPO among options to raise funds, spokeswoman Chie Hirota said by phone. The producer of synthetic spider thread raised 9.6 billion yen through a third-party allocation of new shares to Goldwin Inc. and others, according to a statement last October.

At least 1,749 startups originated from academia in Japan in the year ended March 2015, 45 percent more than a decade earlier, Trade Ministry research shows. Japan allowed state-run universities to invest in venture capital from 2014, according to the ministry.

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