2016-01-12

新年のご挨拶

Happy New Year!

2016 marks three years since IMJIP began operating out of Singapore.
After thoroughly researching the Southeast Asian market in July 2012 and finalizing our strategy for the region that October, in January 2013 we established our Singapore head office. Furthermore, this marked the advent of IMJIP’s unique positioning as a fund with roots in Japan but based in, and with a strong focus on, Southeast Asia.

As we enter the new year I would first like to look back on 2015, which turned out to be a breakthrough year for our firm.

1. New Investments in 20 Promising Companies

In 2015 IMJIP invested in 20 new companies; 13 in Southeast Asia and 7 in Japan. Our investments in Southeast Asia spanned Indonesia, the Philippines, Singapore, Malaysia, and Taiwan, and we are aiming to even further increase our scope of investments. Already this year we have discussed potential investments in new regions including Vietnam and Bangladesh.

2. Contact With Over 500 Startups, 362 Analyzed in Reports

Our startup reports are a critical resource for both our internal decision making and for sharing information with our LPs. These reports, which may reach 5 pages in length, comprise the critical factors involved deciding whether or not to invest, and the database in which they have been collected over the past 3 years has become a valuable knowledge bank for the firm and our LPs.

3. Southeast Asia Tours (July and November)

Truly understanding Southeast Asia is impossible spending time in the region itself. Twice last year, in June and November, our firm hosted tours including leading Japanese businesspeople with interest in expansion to Southeast Asia. The first was to Singapore, Malaysia, and Indonesia and the second to the Phillipines and Indonesia, and both were about a week in length with busy itineraries.

※A group photo at Malaysia’s MaGIC Accelerator during the June tour

※Visiting a store using IMJIP portfolio company Kudo’s service during the November tour

These tours were very well received by participants and if there is interest we will host tours in the region this year as well. In addition, this year we are considering bringing Southeast Asian players to visit Japan.

4. Large Corporations×Startups (Acceleration Programs)

In 2015 IMJIP was involved in the planning and execution of CCC Group’s T-Venture Program (TVP) and Tokyu Corporation’s Tokyo Accelerate Program (TAP). These programs involved significant participation from various stakeholders within the sponsoring corporations, and IMJIP leveraged our network and entrepreneurial know-how to execute highly successful programs. In total approximately 200 companies applied, and in both cases the final selection events were well-attended in large venues (Shibuya Hikarie for TVP and Cerulean Tower Hotel for TAP) and covered by leading media outlets. Both programs will be held again this year, and IMJIP plans to continue our involvement. More broadly, we at IMJIP aim to ensure that such cooperation between large corporations and startups is not a passing trend, but rather becomes a fixture in the Japanese business environment.

※A scene from T-Venture Program’s final selection event

※A scene from Tokyu Accelerate Program’s final selection event

5. Media, Event Participation

This year members of our team have been invited to participate in various events and had their activities covered by the media. That our team is gaining external recognition is an honor, but more importantly I believe it is a reflection of the real growth of our team. Though ultimate responsibility for decisoins lies at the top of our organization, responsibilities regarding execution lie in our team members, and I try to empower each member to be able to act effectively and with a considerable degree of independence. Our team members have risen to the challenge this year, and I hope and expect further growth, investment results, and recognition in the coming year.

6. Portfolio Company Value, Exit Results

In 2015, IMJIP exited 3 investments for, respectively, 3 times, 15.6 times, and 6.4 times initial investment, or a combined 72.3% IRR. In addition, many of our current portfolio companies are progressing well, raising money at valuations up to 16 times that of IMJIP’s initial investment. Our portfolio companies have performed well in major pitch competitions as well, taking the top prize in 3 events.

In 2015, a number of factors, including the potential size of the Southeast Asian market, a growing middle class, and an influx of foreign investment and domestic investment into startups, led to heightened expectations and valuations for startups in the region.

As we enter 2016 the world faces a difficult macroeconomic climate due to weak performance of the Chinese economy and the increase of interest rates in the USA. Nevertheless, I am confident there is still significant value to be obtained in IT sector venture-stage investments in Southeast Asia, and that indeed much of the growth in the sector is yet to come.

IMJIP leverages the diverse skills and experiences of our members to support our portfolio companies as needed. In 2015, for example, we sent one of our members to assist an Indonesian portfolio company in its marketing operations for several months.

In addition, in 2015 we have held monthly monitoring meetings to understand the status of our portfolio companies. Monitoring is a key function of any venture capital firm, and an area in which I hope to deepen our firm’s expertise in the coming year.

The above, in short, summarizes IMJIP’s 2015. But what sort of year would I like 2016 to be? Essentially, this year I want to pay great care to everyday tasks. Having been involved in venture capital in Southeast Asia for the past three years, the investment process can tend to become routine. That tendency is dangerous – it can lead to complacency or an inability to adapt – and for that reason I plan to fight it, and to give due focus to the everyday. It is my hope and belief that this outlook will help lead to positive results.

This year, and in those to come, may the IMJIP team will devote itself fully to being the best firm it can be.

All the best in 2016,

IMJ INVESTMENT PARTNERS

CEO Yuji Horiguchi