Incubate Fund Asia kicks off fundraising spree, plans two new funds
Incubate Fund Asia, a backer of companies such as M2P and Captain Fresh, is embarking on a fundraising spree with its fourth India-focused seed fund. It will launch with an initial capital of $60 million, up from $30 million in the last fund, and the fundraising process is scheduled to begin next month, founder and general partner Nao Murakami said. Mint.
In parallel, the firm is evaluating a second vehicle with Japan’s Sumitomo Mitsui Financial Group Inc, targeting a corpus equal to or slightly higher than its previous $200 million fund. This vehicle is expected to hit the market within six to nine months.
This activity comes at a time when numerous private equity and venture capital firms are entering the market to raise capital. Private equity players such as ChrysCapital, Kedaara Capital and Multiples Alternate Asset Management, as well as venture capital firms such as Blume Ventures and India Quotient, have recently closed new funds.
“India has become a major area of interest for overseas LPs, especially as the IPO market is now fully open,” Murakami said. he said. “There is no other market in Southeast Asia with such extraordinary exit opportunities.”
Incubate Fund Asia is part of the larger Incubate Fund group, headquartered in Tokyo.
The group operates through independent sister funds in Brazil, the US and India and has established a global presence with offices in Tokyo, Singapore, Bengaluru, Mumbai, São Paulo and Mountain View.
The Japanese main fund has backed over 200 startups, while its Asia/India arm has been actively investing in early-stage companies since 2016.
Incubate Fund Asia invested in companies such as Captain Fresh, Yulu, ShopKirana and Plum in its first three funds.
Murakami said the firm is now looking to diversify its LP base “both in terms of geography and type of investor profile” by focusing on attracting more institutional investors from Europe, the UK and the US. He added that Japan will continue to account for more than 50% of the LP base, but that South Korea is also “catching up.”
A growing number of Japanese venture capital and private equity firms are directing capital to India, driven by a healthier exit environment and stronger portfolio results compared to both Japan and the broader APAC region.
“Fundraising is undoubtedly more crowded and LPs are allocating more selectively while the capital is still there. Managers today need a clearer track record, stronger governance and sharper positioning to cut through the noise,” said Shreevardhan Sinha, senior partner at Desai & Diwanji. “Diversifying the LP base reduces dependence on any one geography or economic cycle and increases capital stability across fund cycles. US, UK and European LPs continue to see India as a structural growth story.”
