Digital securitization of VC funds
It has been revealed that approximately 30 companies, including Mitsubishi UFJ Trust and Banking and Progmat, which is independent from the company, will work on digital securitization of venture capital (VC) funds. The Nikkei Shimbun reported on the 12th.
In January 2024, Progma will create a council to promote investment in startup companies. The purpose is to use digital technology to make small investments in VC funds, and to create a system that makes it easier for individual investors’ money to flow to startup companies.
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Participating companies include the two companies mentioned above and VCs, as well as SBI Securities, Mizuho Trust and Banking, and Osaka Digital Exchange (ODX). Law firms will also participate, and policy authorities such as the Cabinet Office will also participate as observers.
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Progma’s mission is to “digitize all value” and utilizes cutting-edge technology such as blockchain. Although the report mentions “digital technology,” it appears that blockchain will be used to make the fund smaller.
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What is venture capital?
An investment company or investment fund that invests in unlisted startup companies. In addition to providing financial support through investment, in many cases we also provide management advice.
For example, if you acquire shares through investment, you can aim to make a profit by selling the shares when the company you invested in goes public.
▶️Virtual currency glossary
The Japanese government is currently working on fostering startup companies.
The Kishida administration decided on the contents of the “5-year startup development plan” in November 2022. At the time, “As of 2022, although a variety of challengers have been born, the start-up rate and the number of unicorns (unlisted companies with a market capitalization of over 100 billion yen) remain at a low level compared to the United States and Europe.” “There are issues,” he said.
The five-year plan sets targets for the amount of investment in startup companies. As of 2022, the amount is 800 billion yen, but by implementing a five-year plan, the goal is to increase the size by more than 10 times (to 10 trillion yen) in 2027, five years later. The government has stated that the public and private sectors will work together to achieve this goal.
He also declared that by creating 100 unicorns and 100,000 startup companies, Japan aims to become Asia’s largest startup hub and one of the world’s leading clusters of startup companies.
It appears that the Japanese government’s measures are behind the programmers’ efforts this time.