Japan's VCs eye Indian startups

BeyondNext Ventures, Enrission India Capital, Incubate Fund Asia and Genesia Ventures are among a handful of Japanese venture capital (VC) firms that are exploring India more aggressively as their investments back home and in southeast Asia fail to produce spectacular exits.

- Rwit Ghosh

The development is at a nascent stage, with most Japanese VCs continuing to sit on the fence, even as the ones that invest in India are keeping fund sizes as well as cheque amounts small. But Japanese VCs said India is increasingly coming on their radar.

"Japanese investors are realising that the southeast Asian market is a difficult market and India is an emerging market open for everyone," Nao Murakami, founder and general partner at Incubate Fund Asia and partner, investments at SMBC Asia Rising Fund told Mint in an interview. "On top of that, the country's IPO market is booming."

Last year, Incubate Fund Asia closed a $30-million fund with 80% of the capital going towards Indian startups. The firm has previously invested in startups such as Captain Fresh, Yulu, ShopKirana (which was recently acquired by Udaan) and Plum.

This year, the company will begin raising its largest fund towards the end of the year, a $75-100 million fund with a focus on India, according to Murakami.

In the first half of 2025, Indian exchanges saw 119 companies going public, collectively raising Rs 51,150 crore (approximately $6.1 billion), according to a S&P Global Market Intelligence report. In the same time period, Southeast Asia's total has been much lower—53 IPOs raising over $1.4 billion, according to a report from Deloitte.

In 2024, Southeast Asia's primary markets saw approximately $3 billion being raised from 122 initial public offerings (IPOs), Deloitte data showed. In comparison, the Indian market raised $19.5 billion from 268 IPOs, according to a release from the National Stock Exchange (NSE).