Shinichiro Hori, chief executive of YJ Capital, the corporate venture capital subsidiary for Japan-based internet company Yahoo Japan, expects its portfolio to remain largely unaffected by the coronavirus crisis, he told Global Corporate Venturing.
“We will provide the same level of support to our portfolio as in the past and we also intend to carry out investment activities as usual,” said Hori, who joined YJ Capital in 2013, the year after it was formed.
Although the Japanese government lacks the legal authority to enforce a full nationwide lockdown, the country entered a state of emergency last month and encouraged its citizens to practise social isolation. YJ Capital had however already adapted its internal activities.
“We at YJ Capital started remote working from late February and all of our corporate and investment committee meetings are held online,” Hori said.
Hori predicted that business-to-business software-as-a-service providers, event services and advertising technology developers will be impacted most severely by the Covid-19 restrictions, but stressed the unit does not operate chiefly as a strategic investor for Yahoo Japan.
“YJ Capital as a CVC does not always make synergy assumptions,” Hori added. “We do not form strategic partnerships with all of our portfolio companies, and we have backed many startups with only financial returns in mind.”
Hori was however quick to point out that YJ Capital has a long history of actively introducing its portfolio companies to Yahoo Japan, its parent Z Holdings and corporate affiliates including SoftBank, Askul, Paypay and Ikyu.
Z Holdings teamed up with online recruitment platform BizReach in late 2019 to launch a job search engine called Stanby. Another portfolio company, restaurant listings app developer Retty, partnered Yahoo Japan the year before to develop an online reservation system and customer attraction and retention strategies.
Yahoo Japan also acquired Dely, the operator of video recipe platform Kurashiru, in 2018 in a bid to boost its food e-commerce capabilities in the country, two years after YJ Capital’s initial investment in the company.
Some startups in YJ Capital’s portfolio are ramping up their services in the wake of the Covid-19 turmoil. Retty began including information on restaurants with takeout and delivery options, and online sales support platform operator BellFace is providing its web-based meeting service free of charge until the end of this month.
Though Z Holdings announced in November 2019 that it had agreed to merge with messaging platform operator Line Corporation, Hori said no concrete plans have been made yet for their respective corporate venturing subsidiaries.
YJ Capital expanded its team amid the pandemic and hired a new partner in February. Hogil Doh comes from another corporate venturing unit, Rakuten Ventures, and will concentrate on e-commerce, online advertising and social networking deals.
The fund will strengthen its commitment to Japan’s entrepreneurial ecosystem, Hori said, noting that it had renewed its sponsorship for Code Republic, a joint accelerator initiative launched with VC firm East Ventures in 2016, and partnered mentoring services provider Coach A to set up startup training programs earlier this year.
Photo courtesy of Shinichiro Hori.
