500 Startups has announced the close of its fund for Japan, more than 18 months after it was first unveiled. The effort is backed by the Japanese government, which has chipped in as an LP via its Cool Japan Fund. (Yes, that really is the name of the fund, which is aiming to use about $1 billion in public money over its lifecycle.)
Initially U.S.-based 500 Startups targeted a $30 million close, but it has reached a total of $35 million thanks to strong interest from investment partners, so says James Riney, its Japan-based partner who runs the fund. CJF, as the government fund is known, is committing $10 million, but beyond a large check it adds gravitas, too.
“[Cool Japan’s involvement] is symbolic in a way because there been a lot of top down influence in the startup ecosystem in Japan,” Riney told TechCrunch in an interview. “As an outsider coming in, having the government’s investment is a validation.”
In particular, Riney said that 500 Startups will work with CJF to open up opportunities for its portfolio companies further down the line: that chiefly means funding.
“We’ll be sourcing and supporting startups at the seed stage, and inviting CJF to look at later $10 million-$20 millions rounds to give startups the firing power to expand,” Riney said.
“CJF has capital to invest outside of Japan but doesn’t necessary have the network. We’ve been extremely aggressive expanding outside of the U.S.,” he added. “No matter where they want to expand to, we have someone locally who is well connected to help them hit the ground running.”
Other investors in the fund include camera-maker Nikon, Mizuho Bank, Mitsubishi Estate and Japanese social network Mixi.
The 500 Startups Japan fund is looking to co-invest in early-stage deals, offering $100,000-$500,000 checks per round. In some cases, it may stretch to $1 million,…