As Southeast Asia disappoints, Japanese VCs turn to India for startup returns

In a new stage, most of the Japanese VCs, most of the Japanese VCs, continue to sit on the fence, even if those who invest in India keep their fund size and control amounts small. However, the Japanese VCs said it was going to India’s radars and more.

“Japanese investors realize that the Southeast Asian market is a difficult market and that India is an open market for everyone,” Investments in SMBC Asia Rising Fund, Inkubate Fund Asia and Ortak’s general partner Nao Murakami. Mint In an interview. “Beyond that, the country’s public offering market is exploding.”

Last year, Asia’s incubation fund closed a $ 30 million fund and 80% of the capital proceeded towards Indian initiatives. The company has previously invested in initiatives such as Captain Fresh, Yulu, Shopkirana (recently purchased by Udaan) and Plum. According to Murakami, the company will begin to raise its largest fund towards the end of the year, a fund of 75-100 million dollars focusing on India this year.

Why India

In the first half of 2025, Indian stock exchanges saw that 119 companies were opened to the public and raised collectively La According to a S&P global market intelligence report, 51,150 CRORE (about $ 6.1 billion). According to a report by Deloitte, the sum of Southeast Asia was much lower in the same time period – 53 public offering is over $ 1.4 billion.

According to Deloitte data, in 2024, the primary markets of Southeast Asia saw that approximately 3 billion dollars were collected from 122 first public offers (public offering). On the other hand, according to a statement from the National Stock Exchange (NSE), the Indian market has collected $ 19.5 billion from 268 public offering.

Last year, India’s largest public offering came from Hyundai Motor India, which collected $ 3.3 billion. In Southeast Asia, the largest public offering in 2024 was an offer of $ 531 million from Malaysia’s 99 Speed Mart Retail Holdings Berhard-ul’s largest public offer. In particular, it was the only public offering exceeding $ 500 million from the region last year.

Who invests

Some other Japanese VCs are forcing accelerating in India, including Beyondnext Ventures, which entered the country in 2019. Mint In a previous conversation.

So far, Beyondnext has supported 14 Indian initiatives according to Krishnan, but the capital of these investments has been released from the Japanese funds. Now, in the process of collecting $ 50 million from Japanese limited partners, an Indian -oriented funding. (LPS is the people or assets that put money on venture funds.)

Ensission India Capital, another Japanese company, allocated $ 120 million in Japan last year to Indian initiatives. Harsh Deodhar, Director of Ensission India Capital, said, “The feedback we have received from our Japanese LPs and does not give great returns,” he said. “Like India’s fixed deposit story, they just run out and therefore they are looking for options.”

So far, the company has invested 16 this year. Some of the latest investments in rowing include protein synthesis start Loopworm, cleaning robotic company Mint Robotics and Bamboo Packaging Start Bambrew.

Registration tends to provide financing from $ 500,000 to $ 1 million and pre -seed. The financing may increase to $ 2 million for subsequent growth investments.

There are others. The Banking Giant SMBC (Sumitomo Mitsui Banking Corporation) invested $ 12 million in the clean energy starting aerem this year, and the Asian Rising Fund was part of a financing tour of $ 35 million in Mortgage-Tech Startup Easy last year.

Similarly, the automobile manufacturer Suzuki focuses on initiatives in the fields of agriculture, financial inclusion, supply chain and mobility after starting India -oriented for the first time. La340 Crore Fund in July last year.

The latest fund of focusing on India is Genesia Ventures, which focuses on pre -seed and seed investments. The company is currently gathering money for the fourth fund (GV-4) and has received $ 22.5 million from Japan Investment Corporation (JIC) as an LP investment.

According to the investment, the country’s Egemen Return Fund, according to its statement, says that “Japanese companies will strengthen their support to partnerships between Japanese companies and local initiatives in order to help Japanese companies create new businesses and expand to new markets.

To be sure, some other Japanese VCs still say in waiting and monitoring mode, but Murakami says it can be a function that tends to move slowly by Japanese companies. “Still slow, but faster than before. So SMBC Asia rising fund is so important because one of the biggest banking groups from Japan puts $ 200 million to support Indian initiatives.”

Thesis for India

In terms of sectors, banking and real estate are generally preferred by larger corporate investors from Japan. However, smaller funds that traditionally invest in sectors such as Fintech, consumer and climate technology are now working on developing sectors such as sustainability, Deeptech and semiconductors.

In addition to these sectors, bulls on Beyondnext biotechnology. Krishnan, “India, vaccines, active pharmaceutical component production, generic drugs such as industries such as industries can take a CT Services approach.

Considering their ties with larger Japanese companies, Beyondnext wants to touch these connections to bring Indian initiatives to Japan, where they can benefit from the R) of Ring aid and then take their products to global and USA.

In the meantime, the registration is quite agnostic. Deodhar, “We are constantly discussing with our LPs, we ask them what they love, what they want to invest in. Currently there is interest in the consumer area,” he said. Loopworm and mint robotics that the company has invested in the first quarter of the 26 financial year are Deeptech games.

Most smaller funds enter Indian initiatives early, receive a larger equity, and will be willing to sit on their shares until the company is opened to the public or for a significant amount. So Deeptech emerged as a new sector for Japanese funds.

Inkuba fund Asia traditionally invested in fintech and consumer companies and offers 750,000 to $ 1 million check dimensions. According to Murakami, they will also target sustainability in the future. “In the fourth fund, the check size will be larger.

For Breakout companies for growth phase investments, the Inkubbe Asian Fund is currently touching the Asian Rising Fund of 200 million dollars of SMBC.

Thanks to the life cycle of the new fund, the portfolio construction will remain the same and the company will invest in 15-20 initiatives. This time, although the fund collection takes place from the Japanese LPs, they will establish funds in India instead of Japan. The company is currently building its thesis around Deeptech, defense and semiconductors.

“Previously, people were suspicious, but people see the success of companies such as Pixxel and Agnikul, and the capabilities of pivot, scaling and value producing value are opening sectors,” he said. “Defense is another category in which India has become a consumer rather than an investor for the first time.”