Incubate Fund Asia Closes $30M Fund to Boost Early-Stage Startups in India and Southeast Asia

Incubate Fund Asia, a venture capital firm from Japan, has successfully closed its third fund with a total corpus of $30 million (approximately Rs 252 crore). Despite falling short of its initial target of $50 million, this fund showed the firm’s support for early-stage startups.

Founder and general partner Nao Murakami made the announcement during an interview with The Times of India, highlighting the fund’s focus on India’s rapidly growing B2B and B2C sectors. The move is expected to strengthen the Asian startup ecosystem, emphasizing nurturing early-stage investments in the region.

The fund, which has recently been rebranded from Incubate Fund India to Incubate Fund Asia, will focus on making approximately 20 early-stage investments and providing follow-on funding to portfolio companies. So far, it has invested in four startups: A children’s fashion brand; Green Fortune, a developer of vertical gardens; Saswat Finance, a lender targeting rural areas; and Fantail, a B2B marketplace for textiles.

Founder and General Partner Nao Murakami explained that the firm’s initial target for the third fund aligns with their current capacity and leadership structure. He noted that the firm may be unable to sustain the pace of investment with a larger fund at this stage, prompting a quicker closure of the current fund. The team plans to initiate a larger fourth fund within the next 18 months, emphasizing hiring senior investors specializing in areas such as deeptech.

Despite its rebranding, the fund remains heavily focused on Indian startups, with 80% of investments still directed toward the Indian market. Broadening its scope to include Southeast Asia is a strategic expansion while maintaining a commitment to India.

Incubate Fund Asia’s previous two funds have invested in 27 companies, including notable names like Captain Fresh and Yulu. The firm aims to leverage its latest fund to support innovative ventures across the B2B and B2C sectors. 

The Incubate Fund group, headquartered in Tokyo, operates independently from its sister funds in Brazil, the United States, and India. The main Japan fund holds over 200 startups in its portfolio and continues influencing the group’s global investment strategy.

The latest fund has attracted a diverse group of limited partners, including family offices from Singapore and South Korea, along with support from the parent Incubate Fund group. With offices in Mountain View, São Paulo, Mumbai, Bangalore, Tokyo, and Singapore, the group has seen considerable success, achieving six exits from its previous two funds and an internal rate of return between 35% and 60%.

The firm plans to lead funding rounds with investments ranging from $500,000 to $1.5 million to support startups and contribute to their growth.

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