Home Venture Capital Football Star Keisuke Honda Sets Up $100 Million Japan VC Fund

Football Star Keisuke Honda Sets Up $100 Million Japan VC Fund

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(Bloomberg) — Former star football player Keisuke Honda, a rare Japanese athlete-turned-angel-investor, is in talks to raise as much as ¥15 billion ($100 million) for his first fund wholly dedicated to startups in his home country.

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The X&KSK Fund plans to invest in about 30 Japanese startups. It seeks to identify at least one that will eventually reach a valuation of $10 billion, Honda said in an interview.

“I realized I’m getting access to pretty good deals because people know who I am from my career as a soccer player,” the 37-year-old said.

In a country where celebrities shy away from speaking about their money or investments, the former AC Milan midfielder faces little competition from other sports stars. It’s a far cry from the US, where the path from star athlete to VC mogul has been trodden by the likes of Andre Iguodala, Shaquille O’Neal, LeBron James and Serena Williams.

“I don’t have any rivals here. I’m in an extremely lucky place,” Honda said.

Honda joins an inflow of investment in Japan’s long-neglected startup scene. Prime Minister Fumio Kishida’s five-year plan to channel more money from the Government Pension Investment Fund and elsewhere into startups lifted investment in the ecosystem to a record high in 2022. While deal values were seen shrinking last year, the number of new players is growing: 61 new venture funds launched in the country during the first half of 2023, up almost 25% from a year ago, according to data compiled by Japanese startup data firm Initial.

For years, the well-traveled sportsman chased fledgling companies abroad, teaming up with celebrities like Will Smith and other venture capital investors in the US to gain an edge. The Dreamers VC, a vehicle he established together with Smith in 2018 with backing from Nomura, has invested in firms like Elon Musk’s brain implant startup Neuralink Corp. and tunneling company The Boring Co.

Honda had originally planned to set up the new fund in the US, where big investors such as Sequoia and Andreessen Horowitz provide far more possible exits than Japan. Corporate VC funds dominate in the third-largest economy, and they don’t write many big checks. Financed by the likes of Toyota Motor Corp. and Sony Group Corp., many prioritize long-term strategic partnerships rather than quick returns and growth.

But Tokyo’s renewed support for startups and Honda’s own track record convinced him to give Japan a chance. His KSK Angel Fund has bet on three companies that have since gone public: Makuake Inc., which he exited at valuations that went as high as ¥143 billion; e-commerce manager AnyMind Group Inc. and English-language education provider Progrit Inc. He also invested in e-scooter ride-share firm Luup KK and blockchain firm Layerx KK and recently sold his stake in worker evaluation system HRBrain Inc.

“I saw the five-year plan and thought, this is it,” Honda said, lauding Kishida’s startup support initiative. “You don’t get many chances like this.”

Honda plans to leverage his connections in the US to help founders raise funds and gain a foothold in the world’s largest consumer market.

“It’s important that someone famous is giving all that support to Japanese entrepreneurs, spurring more activity and drawing attention to what’s happening here,” said Incubate Fund co-founder Yusuke Murata, who has known Honda for seven years and has invested with him. “We all need to grow a much higher tolerance toward risk.”

Dozens of Japanese startups, ranging from software-outsourcing companies to translation gadget makers, are preparing to list on Nasdaq in a bid to win over US investors and lower their reliance on an aging and risk-averse home market.

“Japanese startups have been playing a game that’s too domestic, and one of the reasons lies with VCs here,” Honda said. “We’re going to go after the few startups at the very top that are hungry for growth and turn them into global companies.”

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