MUIP and MUFG Announce JPY 20 Billion Investment Fund for Startups

MUFG, also known as Mitsubishi UFJ Financial Group, and its subsidiary Mitsubishi UFJ Innovation Partners Co., Ltd. (MUIP) have jointly announced the establishment of the MUFG Innovation Partners No. 3 Investment Partnership, a fund with a capitalization of JPY 20 billion. 

MUFG has been actively engaged in various initiatives to meet the financial needs of startups. Their support spans the entire spectrum, from seed to early-stage startups. The company assists growth through equity investments, mainly facilitated by Mitsubishi UFJ Capital Co., Ltd. and MUIP funds. 

MUFG Bank, Ltd. (MUBK) and other affiliated entities offer equity investments for middle to late-stage startups. In total, MUFG has allocated approximately JPY 570 billion for startup investments. Beyond equity investments, MUFG extends its support to startups through debt financing from MUBK and AI-based loans from Mars Growth Capital. This support continues even after startups have undergone initial public offerings (IPOs).

Mitsubishi UFJ Innovation Partners (MUIP) has been actively involved in strategic investments, backing over 40 startups through its two core funds, totaling JPY 40 billion, and an additional fund focusing on Indonesia. With the introduction of the No. 3 Fund, MUIP aims to facilitate collaborative ventures with innovative startups specializing in technologies like generative artificial intelligence (AI). These partnerships aim to elevate the quality of MUFG’s financial services and products.

Diverging from Mitsubishi UFJ Capital (MUCAP), which primarily engages in pure financial investments, MUIP serves as a Corporate Venture Capital (CVC) entity that places assets with collaboration between MUIP and MUFG companies at the forefront. 

MUIP’s assets under management (AUM), encompassing its three core funds and fund of funds (FoF) designated for the United States and Israel, amount to approximately 80 billion yen.

Mr. Takashi Sano, the Director of Strategic Investment at MUIP, has highlighted the third fund’s strategic focus on investments within Japan and the United States. It follows the establishment of the MUFG Ganesha Fund, with approximately 40 billion yen assets dedicated to India, and the MUIP Garuda 1 Fund, with around 13.3 billion yen, devoted to Southeast Asia. While the exact allocation for the No. 3 fund is not confirmed, the No. 2 fund notably increased its investment ratio in Japanese startups compared to the No. 1 fund.

Consequently, MUIP, a subsidiary of MUFG, will persist in its investments in non-fintech startups, including those in generative AI. These strategic investments aim to uncover opportunities for synergy with MUFG. 

Additionally, MUIP plans to collaborate with overseas banks in which it holds investments, such as Thailand’s Bank Ayutthaya and Indonesia’s Bank Danamon. These partnerships will encourage the introducing of innovative technologies from startups within the investment portfolio to the business partners of these overseas banks.

Mitsubishi UFJ Financial Group, Inc. (MUFG), headquartered in Tokyo, has established a vast international network encompassing approximately 2,000 locations in more than 50 countries. 

The group has around 160,000 dedicated employees and offers comprehensive financial services, including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. 

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