Japan’s Coral Capital raises $128m fund to invest in seed, early-stage startups

Japanese venture capital investor Coral Capital announced that it secured ¥14 billion (about $128 million) in commitments for its third investment fund.

The fund, Coral Capital III, will invest in the top seed and early-stage companies in Japan after securing commitments from Mizuho Bank, Mitsubishi Estate, Shinsei Bank, Pavilion Capital, Founders Fund, Dai-ichi Life Insurance, GREE, and other institutional investors.

Two things that make this fund unique are that it will invest in larger seed investments and even larger follow-on. It will also have a longer fund life, the firm said.

“We will be deploying first checks of anywhere from $500K all the way to $5m ーmaking us one of the largest seed to early-stage players in Japan. We have also allocated a significant portion of our fund for follow-on investment,” Coral Capital said.

Over the years, the venture capital firm made a few large follow-on investments into its top companies, ultimately investing about $20 million into SmartHR and $17 million into Graffer.

The company plans to make similar high conviction bets out of this new fund.

Coral Capital was formerly known as 500 Startups Japan until 2019 when the team renamed. The first and final close of Coral Capital III less than three years after the VC firm raised $45 million for Capital Fund II when it rebranded from 500 Startups Japan.

The firm launched its first fund at $30 million in partnership with 500 Startups. The team went independent in March 2019.

Coral Capital is a seed to early-stage venture capital firm investing in the top entrepreneurs across all industries, from fusion engineering to SaaS.

With about $300m under management, it has invested in over 80 companies including SmartHR, KAKEHASHI, Logiless, Kaminashi, Graffer, and Pocket Concierge (acquired by American Express).

“We believe that the greatest companies are built by founders, not investors. The founders we invest in are exceptional without our help. Our job is to be their multiplier. We help them go faster and go bigger, while giving them the space to build their companies as they see fit,” the VC firm said.