Japan, eclipsed by China in startup activity, is boosting efforts to get foreign venture capital firms more involved with its entrepreneurs.
The government-backed Cool Japan Fund said Thursday it will contribute $10 million to become the largest limited partner in the Japan-focused fund of 500 Startups, a San Francisco-based venture firm specializing in early-stage investments. The partnership aims to help startups in the archipelago expand abroad by leveraging the venture firm's global network in about 60 countries.
The deal is unusual in a country where startup funding is dominated by local corporations, and marks the first time the state has directly backed a non-Japanese venture capital firm. The investment helps to show that foreign venture backers will be supported if they dedicate more resources to Japan.