Jafco Group has established a new fund exceeding 100 billion yen—the largest in Japan—while a Tokyo University-affiliated VC firm Tokyo Edge Capital Partners has set up a 50 billion yen fund. The funds will focus on investing in cutting-edge technologies such as nuclear fusion and quantum computers, with the goal to create “unicorns.” Surprisingly few unicorn companies have emerged from Japan, given its place in the global economy and its highly skilled workforce.

Jafco’s 100 billion yen fund is set to launch by early 2026., with 20% of the total amount provided by the company's own capital and the remainder raised from overseas investors and financial institutions. The investment per case is expected to be around 400 million to 500 million yen, but may be increased if there are companies with high growth potential.

The University of Tokyo Edge Capital Partners fund will select companies with cutting-edge technologies, including startups originating from the University of Tokyo and those in the life sciences field, and invest 1 billion to 3 billion yen per company, with a maximum of 5 billion yen. The fund will continue to support companies even after the initial investment to help emerging companies grow without going public.

Until now, the main battlefield for startups has been the internet and cloud-related fields, which require less capital and have a shorter time to market. In recent years, the focus has shifted toward deep tech fields such as artificial intelligence (AI), space, and nuclear fusion, with increasing funding needs.

However, according to Prequin, the average fund size of domestic VC funds in 2024 is approximately 6 billion yen, which pales in comparison to the average of 15 billion yen in the United States. Domestic VCs are seeking to make up for this shortfall by concentrating their investments in areas where Japan excels, such as deep tech.