UTEC Launches $275M Deep Tech Fund - Asia Investment

UTEC Closes First Round of its Fifth Investment Fund

The University of Tokyo Edge Capital Partners (UTEC), a firm specializing in deep tech investments, has announced the initial closing of its fifth fund. This fund is projected to reach 30 billion JPY, equivalent to approximately $275 million USD, by June 2021.

Currently managing total assets of around $780 million, UTEC positions itself as a leading venture capital fund in Japan with a focus on science and technology. It is also recognized as one of the largest deep tech funds operating within Asia.

Strategic Partnerships with Leading Universities

UTEC operates as an independent entity, maintaining close collaborative relationships with numerous universities. A significant partnership exists with The University of Tokyo (UTokyo), specifically through its Technology Licensing Office (TLO). This collaboration facilitates the spin-off and investment in companies originating from university research initiatives.

Beyond UTokyo, UTEC actively engages with researchers from institutions such as Waseda University, Kyoto University, Stanford, UC Berkeley, Carnegie Mellon, Cambridge University, the National University of Singapore, and the Indian Institute of Technology.

Investment Focus Areas

UTEC’s investment strategy centers around three primary domains: healthcare and life sciences, information technology, and physical sciences and engineering.

The firm specifically targets technologies that address critical challenges facing Japan, including a growing aging population, a shrinking workforce, and the need for digital transformation within established industries.

Expanding Investment Capabilities

“UTEC 5 will enable us to allocate increased funding, ranging from seed and early stages to pre-IPO and M&A phases, both in Japan and internationally, with greater consistency,” stated Tomotaka Goji, managing partner and president, in a recent announcement.

He further expressed confidence that this expanded capacity will empower portfolio companies to address significant global issues.

Global Collaboration and Portfolio Growth

To broaden its reach, UTEC collaborates with other investment funds, including Arch Venture Partners and Blume Ventures, to identify promising investment opportunities worldwide.

The firm’s current portfolio encompasses over 80 Japanese startups and 30 companies from other regions, including the United States, India, Southeast Asia, and Europe. To date, 25 portfolio companies have successfully exited.

Successful Exits and Portfolio Highlights

These exits have taken the form of initial public offerings (IPOs) and mergers & acquisitions (M&A). Thirteen investments have gone public, collectively achieving a market capitalization of approximately $15 billion, while twelve have been acquired through M&A transactions.

Notable exits include 908 Devices, a mass spectrometry company listed on Nasdaq; Fyusion, a computer vision startup acquired by Cox Automotive; and Phyzios, which Google acquired in 2013.

Supporting University Spin-offs

Approximately half of UTEC’s portfolio consists of companies spun out from university research. The firm provides comprehensive support to these ventures, assisting with crucial hiring, including executive leadership, business development, and the implementation of effective go-to-market strategies.

Initial investments typically range from $500,000 to $5 million, with the provision of subsequent funding rounds.

“We generally increase our investment in later funding stages, potentially investing up to $23 million in a company throughout its lifecycle,” explained Kiran Mysore, UTEC principal and head of global AI investments, to TechCrunch.

Recent Investments and Academic Collaboration

Recent investments include BionicM, a personal mobility robotics company originating from UTokyo, and Locix, a spatial intelligence solution developer spun off from UC Berkeley.

UTEC also actively fosters collaboration between its portfolio companies and academic institutions. For instance, Indian biotech Bugworks is partnering with the Tokyo Institute of Technology, while Japanese robotics firm Mujin is collaborating with Carnegie Mellon.