WATI editor
Jun 10, 2024
Kepple, an investor service company backed by Nikkei Inc., has completed fundraising for a ¥10 billion secondary market fund focused on unlisted stocks. The fund will invest in domestic startups preparing for initial public offerings (IPOs).
By purchasing shares from existing investors such as venture capitalists (VCs), Kepple aims to allow startups to focus on business expansion without rushing their IPOs.
The fund, supported by over 20 investors including Japan Investment Corporation (JIC) and regional banks, has exceeded its initial target of around ¥5 billion. According to Kepple, this is the largest secondary fund targeting domestic startup stocks. The fund will target startups that have rebounded from the COVID-19 pandemic and aim to go public within about three years. It plans to invest in around 30 companies across various sectors, from deep tech to consumer services, with an investment period of 10 years.
Since 2022, Kepple has already begun acquiring shares of unlisted companies, investing approximately ¥3 billion in 13 startups. Investments per company range from several million yen to a maximum of ¥600 million. Recently, Kepple acquired shares from existing shareholders of LINK-US, a developer of ultrasonic welding devices, and Yell, a human resource development support company.
M&A Cloud, which operates a platform for mergers and acquisitions (M&A) and fundraising, reports that over 50 VC funds will mature in 2024. This maturity forces VCs to choose between M&A or IPO for their portfolio startups. However, "small IPOs" have been criticized for pushing startups to go public prematurely, leading to stagnation post-IPO. Kepple's fund aims to address this issue by providing startups with the time needed for business growth, thereby maximizing investment returns and resolving the "small IPO" problem.