Aiming high: Staff prepare for a test at satellite-launch startup Interstellar Technologies in Japan. Honda says his fund won’t have rivals in his home country. — AFP
TOKYO: Former star football player Keisuke Honda, a rare Japanese athlete-turned-angel-investor, is in talks to raise as much as 15 billion yen for his first fund wholly dedicated to startups in his home country.
The X&KSK Fund plans to invest in about 30 Japanese startups. It seeks to identify at least one that will eventually reach a valuation of US$10bil, Honda said in an interview.
“I realised I’m getting access to pretty good deals because people know who I am from my career as a football player,” the 37-year-old said.
In a country where celebrities shy away from speaking about their money or investments, the former AC Milan midfielder faces little competition from other sports stars.
It’s a far cry from the United States, where the path from star athlete to venture-capital (VC) mogul has been trodden by the likes of Andre Iguodala, Shaquille O’Neal, LeBron James and Serena Williams.
“I don’t have any rivals here. I’m in an extremely lucky place,” Honda said.
Honda joins an inflow of investment in Japan’s long-neglected startup scene. Prime Minister Fumio Kishida’s five-year plan to channel more money from the Government Pension Investment Fund and elsewhere into startups lifted investment in the ecosystem to a record high in 2022.
While deal values were seen shrinking last year, the number of new players is growing: 61 new venture funds launched in the country during the first half of 2023, up almost 25% from a year ago, according to data compiled by Japanese startup data firm Initial.
For years, the well-travelled sportsman chased fledgling companies abroad, teaming up with celebrities like Will Smith and other VC investors in the United States to gain an edge.
The Dreamers VC, a vehicle he established together with Smith in 2018 with backing from Nomura, has invested in firms like Elon Musk’s brain implant startup Neuralink Corp and tunnelling company The Boring Co.
Honda had originally planned to set up the new fund in the United States, where big investors such as Sequoia and Andreessen Horowitz provide far more possible exits than Japan.
Corporate VC funds dominate in the third-largest economy, and they don’t write many big checks. Financed by the likes of Toyota Motor Corp and Sony Group Corp, many prioritise long-term strategic partnerships rather than quick returns and growth.
But Tokyo’s renewed support for startups and Honda’s own track record convinced him to give Japan a chance.
His KSK Angel Fund has bet on three companies that have since gone public: Makuake Inc, which he exited at valuations that went as high as 143 billion yen; eCommerce manager AnyMind Group Inc and English-language education provider Progrit Inc.
He also invested in e-scooter ride-share firm Luup KK and blockchain firm Layerx KK and recently sold his stake in worker evaluation system HRBrain Inc.
“I saw the five-year plan and thought, this is it,” Honda said, lauding Kishida’s startup support initiative. “You don’t get many chances like this.”
Honda plans to leverage his connections in the United States to help founders raise funds and gain a foothold in the world’s largest consumer market.
“It’s important that someone famous is giving all that support to Japanese entrepreneurs, spurring more activity and drawing attention to what’s happening here,” said Incubate Fund co-founder Yusuke Murata, who has known Honda for seven years and has invested with him.
“We all need to grow a much higher tolerance toward risk.”
Dozens of Japanese startups, ranging from software-outsourcing companies to translation gadget makers, are preparing to list on Nasdaq in a bid to win over US investors and lower their reliance on an ageing and risk-averse home market. — Bloomberg
