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Temasek startup fund raises USD 70 million from Japan’s Marubeni and SMBC

Fund will invest in AI ventures in such countries as India and China.

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Japan’s Sumitomo Mitsui Banking Corp. and trading house Marubeni are investing a total of USD 70 million in a new fund linked to state-owned Singaporean investment group Temasek Holdings, aiming to nurture Asian technology startups.

ABeam Consulting and the government-backed Development Bank of Japan are also chipping into the fund launched by Temasek venture capital arm Vertex Venture Holdings. Japanese investors are putting up USD 180 million in all — roughly a quarter of the USD 730 million in total funding.

The investment vehicle will primarily back startups in China and India. For Japanese companies looking to partner with ventures strong in artificial intelligence and the “internet of things,” the fund’s targets will become leading candidates.

Marubeni is investing USD 50 million in the fund, and SMBC USD 20 million. They join previously pledged Japanese investors such as Aozora Bank and Risa Partners.

The Japanese investors will work to link enterprises at home with the startups abroad. The arrangement will encourage technology and capital tie-ups, as well as acquisitions.

For startups, the fund offers a chance to connect with Japanese companies with highly developed technological expertise and extensive client networks. The younger companies can expect to gain access to technology that will supplement their own and increase revenue.

Vertex has offices in several key global locations, such as Silicon Valley, China, India, and Israel. It was an early backer of Singapore-based ride-hailing provider Grab.

This article first appeared on Nikkei Asian Review. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei. 36Kr is KrASIA’s parent company.