Mizuho to set up 10 billion yen venture debt fund for Japan

MIZUHO Financial Group will launch a venture debt fund worth 10 billion yen (S$95 million) in Japan, a senior executive said, to address the scarcity of startups in the country.

The fund, to be created as early as this month, will provide financing to middle and late stage startups without diluting their existing shareholder equity, Kazutoshi Isogai, Mizuho’s retail and business banking chief, told Reuters.

“We want to help finance startups in deep tech fields such as biotech, space, renewable energy and artificial intelligence where large upfront investments are required for research and development,” he said.

The move comes as the Japanese government is working to boost the amount of investment in startups to 10 trillion yen (S$95 billion) in five years. Decades of weak economic growth had deterred private investment and led to flagging innovation which is eroding the country’s competitiveness.

The plan also calls for creating 100 unicorns, startups with a valuation in excess of 100 billion yen, from only about a dozen such firms right now.

Mizuho’s bigger peer Mitsubishi UFJ Financial Group has announced a plan to create a 20 billion yen venture debt fund for Japan, building on existing US$750 million debt funds for overseas startups. REUTERS