Minerva’s $44M Second Fund Targets Japan’s Late-Stage Startups as IPO Bar Rises

A closer look at how Japan’s tightening IPO rules and capital gaps are reshaping late-stage investing

Tokyo-based Minerva Growth Partners has announced the first close of its second growth equity fund, securing about 7 billion yen (US$44 million) in commitments. While the amount itself is modest by global standards, the context around the fund says far more about where Japan’s startup ecosystem is heading. Minerva Growth Partners II is targeting a final size of roughly 20 billion yen (US$125 million) and will focus on backing Japanese technology-driven companies as they scale before and after going public.

Backers include the state-supported Japan Investment Corp, according to people familiar with the matter, highlighting continued public-sector involvement in addressing Japan’s shortage of late-stage capital. The fund is aimed at a segment that has long struggled to attract consistent growth equity support, particularly as startups face rising expectations ahead of public listings.

A structural gap in Japan’s startup market

Japan’s venture ecosystem has produced strong early-stage innovation, but many startups still encounter structural limits as they approach IPO. These include smaller market capitalisations, thinner trading liquidity, and limited access to large pools of growth capital. As a result, companies often list earlier than ideal, sometimes before building the scale needed to compete effectively as public firms.

This issue is becoming more pronounced as the Tokyo Stock Exchange tightens listing standards for smaller companies. Higher requirements around governance, profitability, and growth resilience are extending IPO timelines and leaving late-stage startups caught between private funding constraints and tougher public-market thresholds.

Why growth equity is gaining relevance

In more mature markets such as the United States, companies typically raise substantial private capital before listing to strengthen operations and market positioning. Minerva believes this model is increasingly applicable in Japan as capital strategies grow more complex and the path to IPO becomes longer and more selective.

“The number of companies not rushing to IPO and aiming to go public after growing further is increasing,” said Kensuke Murashima, managing partner at Minerva. Murashima, a former Morgan Stanley banker, founded the firm in 2020 alongside former Mercari CFO Kei Nagasawa, with backing from Hong Kong-based Pleiad Investment Advisors.

Fund II strategy at a glance

Minerva’s second fund will primarily target minority growth investments in private companies, while maintaining flexibility across the private-to-public spectrum. Its mandate includes:

• Minority growth investments in late-stage private startups
• Selective growth and management buyouts or carve-outs
• Private investments in public equities when market conditions allow

Sector focus remains on internet, software, and technology-enabled services, where the firm sees durable long-term demand and opportunities for operational improvement ahead of IPOs.

Track record still taking shape

Minerva’s first fund, launched in 2020, closed with about US$120 million in commitments and invested in eight Japanese technology-focused companies. One portfolio company, payments firm Infcurion, listed on the Tokyo Stock Exchange Growth Market in October 2025, marking the fund’s only disclosed public exit so far.

The firm has not released performance metrics such as DPI or TVPI, making it too early to assess overall outcomes. Market observers note that a single IPO can skew perceptions, particularly in a market where exits remain limited and timelines are long.

A wider opportunity for late-stage capital

Industry watchers say Minerva’s timing aligns with broader shifts in Japan’s funding landscape. Tighter listing rules are widening the gap for Series C and D startups that need capital but lack immediate exit options. This is opening space not only for growth equity funds, but also for secondary investors and venture debt providers offering bridge financing or liquidity solutions.

These dynamics are especially visible in deep tech and mobility, sectors where innovation remains strong but capital intensity and longer development cycles make early IPOs less attractive.

Conclusion: a small fund with outsized implications

Minerva’s US$44 million first close may not grab headlines on size alone, but it underscores a deeper transition in Japan’s startup ecosystem. As IPO standards rise and growth timelines stretch, the role of late-stage private capital is becoming harder to ignore.

If more companies choose to delay listings and build scale privately, funds like Minerva Growth Partners II could play a critical role in shaping how Japan’s next generation of tech companies mature—before they ever ring the opening bell.

Quick Takeaways

• Minerva Growth Partners raised ¥7 billion (US$44 million) in the first close of its second growth equity fund, targeting a final size of ¥20 billion.
• The fund focuses on late-stage Japanese technology startups navigating the period before and after IPOs.
• Japan continues to face a shortage of growth-stage capital, often pushing startups to list earlier than ideal.
• Tighter Tokyo Stock Exchange listing rules are widening the funding gap for Series C and D companies.
• Minerva’s strategy reflects a broader shift toward longer private growth cycles and greater demand for crossover and growth equity investors in Japan.