Japan Investment Corporation's newsletter for the month of February 2025.
In an increasingly interconnected global economy, Japan Investment Corporation (JIC) is empowering Japanese startups to become truly global contenders. As part of its evolving investment framework, JIC’s Go Global strategy aims to cultivate deeper international engagement, attract global investment, and enable Japanese startups to scale beyond domestic borders. The effort reflects Japan’s broader ambition to strengthen innovation, diversify capital flows, and produce globally competitive companies.
A Strategic Pillar in JIC’s Investment Framework
The Go Global policy was formally introduced as one of JIC’s major strategic themes in September 2022 and continues to be a core priority. It sits alongside other long-term initiatives focused on deep tech, life science, and startup growth stages, reflecting JIC’s comprehensive approach to mobilizing risk capital in areas where private markets may be undersupplied.
At its heart, the Go Global strategy is designed not only to support Japanese startups in expanding internationally, but also to enhance the entire country’s innovation ecosystem by building bridges with overseas venture capital (VC) networks, knowledge sources, and global market opportunities.
Supporting Japan’s Startups Through Global VC Links
A key mechanism of the Go Global strategy is JIC’s investment as a limited partner (LP) in overseas VC funds. Starting in 2022, JIC began deploying capital into select international VC vehicles to deepen Japan’s connectivity with global investment hubs. Under this approach, JIC can bring risk capital from overseas into Japan and help Japanese startups benefit from international expertise, market insight, and expansion support.
Through these LP investments, JIC helps create a network where global and domestic investors can collaborate, creating a two-way street of capital and knowledge. These linkages help Japanese startups tap into markets like Europe, the United States, and Southeast Asia, where VC ecosystems are highly established. In doing so, JIC’s Go Global strategy aims to expand global access to capital, expertise, and mentorship for Japanese entrepreneurs at all stages.
Early Results and Practical Support
According to internal data from JIC’s Go Global reviews, the organization’s overseas VC partners are actively considering and executing investments in Japan. This includes investments in software companies expanding into global markets. Going forward, JIC plans to broaden its support to explore additional ways to assist deep tech startups in their international expansion and overall globalization efforts.
The support provided to portfolio companies by JIC's VC partners extends beyond capital. The VCs offer assistance in establishing overseas cost centers and R&D functions, help set up local offices with external advisors, and support talent recruitment abroad. Through such practical support, JIC’s Go Global strategy goes beyond traditional investment and helps Japanese startups build the operational and market foundations needed to scale internationally.
Driving Japan’s Ecosystem Toward Global Unicorns
Another key motivation of Go Global is to lay the groundwork for more Japanese global “unicorns”—startups that reach billion-dollar valuations and have international impact. By connecting domestic startups with international VC environments and global capital flows, JIC is seeding conditions for long-term growth that extends outside Japan’s relatively insular capital markets.
This focus aligns with broader global trends: innovation ecosystems today are defined as much by their international reach and collaboration as by domestic performance. Japan’s startup landscape, through initiatives like JIC’s Go Global strategy, seeks to embed itself in these transnational innovation networks, unlocking new opportunities for both Japanese and foreign partners alike.
A Long-Term Vision for Global Collaboration
Looking forward, JIC’s Go Global strategy continues to evolve with two complementary objectives:
- Attract global risk capital and expertise into Japan – By building relationships with lead international VCs, JIC aims to strengthen the domestic venture market with diversified funding sources and world-class best practices.
- Support Japanese startups in global expansion – By connecting founders to global networks, markets, and investors, the strategy enables companies to pursue international customer bases and strategic scaling opportunities.
In a world where innovation and investment increasingly transcend borders, JIC’s Go Global strategy positions Japan’s ecosystem to compete, collaborate, and thrive on a global stage—capturing growth opportunities for founders, investors, and industries alike.
Column: The Hunt for Unicorns: How the US and Global SWFs fill the VC Capital Gap for “Moon-Shooting Ventures”
By Winston Ma, Executive Director of Global Public Investment Funds Forum and Adjunct Professor, NYU Law School
In July 2025, Pat Gelsinger, former Intel chief executive officer, called for a US sovereign wealth fund to keep America’s technological edge. Just a month in, a US SWF materialised under Donald Trump’s administration, owning 10% of Intel Corporation – the only American company manufacturing advanced chips on US soil.
A few months later, the Trump administration announced a plan to take equity stake in the former Intel CEO’s Chip startup xLight, which in return would receive up to $150m to develop ultraprecise lasers for squeezing more circuits onto semiconductors. (Most likely, the US government would become xLight’s largest shareholder, according to the Wall Street Journal report).
The startup’s plan is audacious. XLight plans to build massive ‘free electron lasers’ powered by a particle accelerator to create a more powerful and precise light source for use in semiconductor chip fabrication plants. The most-advanced lasers used by ASML, the current industry leader, produce extreme ultraviolet light at a wavelength of around 13.5 nanometres. XLight’s lasers are targeting much more precise wavelengths of down to 2nm.
New global trend
The xLight investment shows that the US SWF under the Trump administration is enthusiastic about early investments into tech startups. The US SWF is joining a global trend of sovereign investment funds becoming new, powerful venture capitalists, actively scouting startups themselves, investing earlier and even creating their own standalone VC arms, such as Taiwania Capital, bankrolled by Taiwanʼs SWF.
For example, The UK government launched its £500m Sovereign AI Unit in July 2025 to build and scale domestic AI capabilities. In 2024, MGX, the newly established tech investing company affiliated with the United Arab Emirates’ SWF Mubadala, joined OpenAI’s mega funding round of $6.6bn as a major investor. Similarly, JIC plays an important role in strengthening Japan’s industrial competitiveness as a government‑backed fund, and has positioned Deep Tech as one of its core investment themes.
The SWFs’ ample resources, preference for lower profile and long time horizons make them the perfect shareholders and strategic partners for tech startup founders. In the case of xLight, the $150m investment will help the laser venture meet its goal of producing its first silicon wafers by 2028, Gelsinger said. But that does not sway the US government’s investment risk appetite.
‘This partnership would back a technology that can fundamentally rewrite the limits of chipmaking,’ Commerce Secretary Howard Lutnick said in a press release. This underscores that the long-term capital of SWFs can bridge the important financing gap between research breakthroughs (‘a proof of concept’) and scalable technologies (‘commercial production’).
Focus on hardware over software
Another remarkable aspect of the xLight case is that it is an investment in AI hardware – or advanced manufacturing, in a broader context. In contrast, Silicon Valley mostly chases software startups, not the high-barrier, capital-intensive ‘hard tech’ innovation.
Roughly 90% of US venture capital today flows into software – an investment pattern optimised for nimble businesses and quick returns, but not strategic for national power, according to analysis by the Institute for Security and Technology. As such, the US SWF also fills the hardware gap in the VC capital market.
Probably it’s no coincidence that, across the Pacific, Chinese SWFs are also focusing on AI hardware startups. In early 2025 Beijing launched a Rmb60.1bn ($8.4bn) national AI fund, whose main shareholder is the National Integrated Circuit Industry Investment Fund III (the ‘Semiconductor Chip Fund’), which is backed by China’s Ministry of Finance and other state-owned enterprises, according to CNBC reports.
Official releases of the AI fund have said that one of its main focuses will be ‘embodied AI’. Just like the mobile internet revolution last decade, in the AI age the US leads in fundamental research, but China excels at applying tech – especially AI hardware such as intelligent robotics and other physical AI devices, where the ‘made in China’ manufacturing capabilities are a unique advantage.
Bridging the financing gap
Overall, global SWFs are the ‘unicorn-makers’ behind the scenes. Their tech investments are on par with private equity and venture capital funds, but often with a strategic objective on top of financial returns. That’s why they are especially suited for investing in high-risk, capital-intensive and long-horizon tech ventures, who often struggle to raise capital.
Therefore, the US SWF may provide important capital to bridge the financing gap in the tech venture world. It’s emerging as the financier for the hard tech startups, whose technologies are vital to national competitiveness, but whose risk, scale and time dissuade private investment.
Hence it is significant that In June 2024, JIC’s operating period was extended from 2034 to 2050, enabling it to take a truly long‑term approach in fields such as Deep Tech. Because Deep Tech often requires 10 to 20 years from initial investment to commercialization, it can be challenging for the private sector to support these areas alone. With its long-term capital, JIC also enables private VC funds (such as specialized funds like Abies Ventures) as an LP investor to encourage broader participation from diverse venture capital firms.
In summary, SWFs and government-backed funds like JIC could not only directly provide long-term capital for tech ventures’ high-risk project, but also foster a deep tech ecosystem that stimulate diverse sources of capital and talents to support next-generation industries.
For example, Japanese tech players like NTT are developing Innovative Optical and Wireless Network (IOWN) – the next‑generation foundational technology expected to advance 5G and 6G – through collaboration among companies in Japan and overseas. It is worth noting that Shinko Electric—one of JIC Capital’s portfolio companies is also participating in IOWN‑related initiatives. (JIC Capital is a buyout fund under the JIC umbrella.) More similar investments could be expected to emerge soon in AI tech, quantum computing, and other deep tech fields in Japan.
Winston Ma, CFA and Esq. is the Executive Director of Global Public Investment Funds Forum and Adjunct Professor of NYU School of Law, and he is the author of The Hunt for Unicorns: How Sovereign Funds Are Reshaping Investment in the Digital Economy.
Portfolio Company News (Theme: Space, DeepTech)
- ArkEdge Space Inc. collaboration to strengthen resilience of satellite positioning systems <collaborating with key institutions in the UK, US and Australia to realize the LEO-PNT system that supports critical infrastructure> (Jan 22)
- Axelspace continues to provide AxelGlobe satellite images to Japan’s Ministry of Land, Infrastructure, Transport and Tourism, Geographical Survey Institute's digital national basic map related projects (Jan 21)*
- Ispace selected for Japan Aerospace Exploration Agency’s Space Strategy Fund project “High-precision landing technology in the lunar polar regions”
(Jan 16)* - GITAI Awarded Contract Under Missile Defense Agency’s $151B SHIELD IDIQ Program (Dec 23)*Japanese only
JIC Releases
- JIC makes LP investment in Minerva Growth Partners II LP (Jan 14)
- JIC press conference (Dec 26)
About Japan Investment Corporation (JIC)
Japan Investment Corporation (“JIC”) was established on September 25, 2018 under the Industrial Competitiveness Enhancement Act. JIC’s investment focus areas are driving the creation of a positive cycle of domestic investment and innovation, creating and developing startups, leveraging untapped regional management resources of academic startups and leading medium enterprises and promoting business consolidation in response to changes in market and business environment. JIC provides risk capital to these areas through funds independently established by JIC and LP investment in private funds to promote open innovation and contribute to strengthening the competitiveness of Japanese industries and expanding the investment ecosystem.
