A Tokyo-based Japanese venture capital firm, Beyond Next Ventures, is staying committed to early-stage, cutting-edge technology startups in Asia, despite a global slowdown in moonshot investments. Beyond Next Ventures is actively raising capital for its third fund, BNV Fund 3, with a target of up to ¥25 billion (approximately $168 million). The company recently announced the successful completion of the first close, securing ¥10 billion (around $67.7 million) to invest in deep tech startups in fields like robotics and biotech.
The firm’s objective is to finalize the fund by March 2024, allocating the capital for seed, Series A, and later-stage rounds in approximately 25 companies. According to CEO Tsuyoshi Ito, their investment range per venture falls between $670,000 and $2 million, potentially reaching up to $13 million across multiple funding rounds per company. This marks a significant increase from their previous fund’s maximum investment limit.
Beyond Next Ventures is convinced that the scarcity of later-stage funding opportunities in Japan is inhibiting startups from achieving global expansion and limiting their overall valuations. According to a 2021 report by the World Bank, Japan lags behind Europe, North America, and other countries in terms of later-stage investments. Ito points out that one reason for this is that institutional investors, as limited partners, have only recently become actively involved in VC investments. Consequently, many VC firms had to focus on supporting seed and early-stage startups. Additionally, the Tokyo Stock Exchange Growth Market’s regulations have driven startups to pursue early IPOs to raise funds.
However, the landscape is changing as funding for middle- to later-stage startups in Japan is growing, and companies no longer feel the same urgency to go public. To offer consistent financial support to startups on a global scale, Beyond Next Ventures plans to increase later-stage investments, including Series C and Series D, as well as additional follow-on investments through their latest fund. They also intend to extend the fund’s operational period to 11 years, one year longer than the previous fund, with the option for an additional extension of up to three years with the approval of limited partners.
Beyond Next Ventures focuses on identifying deep tech startups emerging from universities and research institutions, providing them with entrepreneurial strategies to commercialize their innovative technology and scientific inventions. The VC firm collaborates with over 3,000 business and management experts to connect with research teams.
With the addition of this new fund, Beyond Next Ventures will manage more than $316 million in assets. Their limited partners for BNV Fund 3 include existing supporters like the Organization for Small and Medium Enterprises and Regional Innovation, MUFG Bank, Dai-ichi Life Holdings, and Tokyo Century. New investors such as SMBC Nikko Securities, Mitsubishi UFJ Trust and Banking, and FFG Venture Business Partners have also contributed to this funding round.
In 2020, the VC expanded its presence by opening a regional office in India, recognizing the substantial growth in the Indian startup market as an attractive long-term business expansion destination for Japanese portfolios.
Founded in 2015, Beyond Next Ventures initiated its first fund ($37 million) in 2015 and a second fund ($111 million) in 2019. It has invested in nearly 80 healthcare, agri-food, and deep tech companies in both Japan and India. The firm has successfully exited some of its portfolio companies from Fund 1 and Fund 2 through initial public offerings (e.g., Susmed and QD Laser) and mergers and acquisitions (e.g., Repertoire Genesis and GigIndia).
Ito highlighted the rising momentum of Digital Therapeutics (DTx) in Japan, mentioning the success of CureApp, a portfolio company that raised approximately ¥7 billion ($47 million) last year from Carlyle. CureApp developed a therapeutic app enabling users to obtain medical device approval and insurance reimbursement. Susmed, another portfolio company, introduced a therapeutic app for insomnia patients and became the first Japanese IPO in the digital healthcare sector. Beyond Next Ventures has also invested in innovative companies like Regional Fish Institute, known for using genome-editing technology to breed fish more efficiently, Elephantech, a manufacturer of eco-friendly printed circuit boards, and iCare, a Japanese healthcare management provider.
