From its founding in 1992, the vision of the GLOBIS Group has been to create a management ecosystem of people, capital, and knowledge and to drive societal creation and transformation.

By 1995, the “people” aspect was represented by the business school and corporate training ventures, and the “knowledge” aspect by the publishing and management research ventures.

Initially, founder Yoshito Hori intended to wait until GLOBIS had established credibility before launching the venture capital business. However, at the end of 1995, he decided to advance the plan. This decision was deeply influenced by the circumstances of the Japanese venture capital industry at that time.

In the 1990s, Japan’s venture capital differed in many ways from that of the United States. While American venture capital focused on early stage companies shortly after their founding, Japanese venture capitalists primarily invested in later-stage companies that were already considering going public. Moreover, while American venture capitalists took a direct, proactive approach to supporting management, Japanese venture capitalists typically only provided funding.

Hori saw a societal need here and felt a mission to do what no one else was doing. He decided to launch the venture capital business—GLOBIS Capital Partners (GCP).

When Hori began raising capital for the first fund, the GLOBIS Incubation Fund, he reached out to old acquaintances, entrepreneurs he met at the New Business Conference, and anyone who might act as an angel investor. He ended up having face-to-face meetings with about fifteen people.

When soliciting investment, he could only passionately promise, “We won’t waste your money,” as he had no track record as a venture capitalist. He fervently explained the significance of investing in early stage companies and the concept of supporting their management.

Ultimately, forward-thinking institutional investors and founders of influential companies decided to invest. It was rare for these players to get involved in an inaugural fund, but the concept of “investing in early stage companies and supporting their management” resonated. These investors believed in GCP’s potential. Thus, at the end of October 1996, the GLOBIS Incubation Fund was established with 540 million yen.

The GLOBIS Incubation Fund had a challenging start due to lack of experience, the absence of precedents, and a significant economic downturn in the years following its creation. Co-founding partner Soichi Kariyazono recalls, “There were times when the invested money flowed back to the parent company, or the president pocketed the money. Hori and I would rush in and somehow manage to retrieve it. We learned through failure, were blessed with wonderful mentors, and were taught many things.”

Despite such bitter experiences, the fund ultimately achieved significant results. It invested in a total of thirteen companies, six of which went public. One of these companies was Works Applications. The CEO at the time, Masayuki Makino, recalls being turned down by over 100 venture capital firms just because the company was young: “Among them, only GCP listened and was the first to invest.”

The investment returns were substantial. The investors, who each contributed 100 million yen, received a return of about eight times their investment.

Thus, GLOBIS laid the foundation for its venture capital business.

On March 5, 1999, the Nihon Keizai Shimbun reported the establishment of a joint venture between Apax and GCP: Apax GLOBIS Partners.

This joint venture had a significant impact on GCP. While the GLOBIS Incubation Fund was 540 million yen, the following Apax GLOBIS Japan Fund was ambitiously set at 20 billion yen—about forty times larger. At the time, GLOBIS’s venture capital division was a newcomer, established only about three years prior. But Apax was a giant US venture capital firm and major historical player with a global presence, known for investments in companies such as Apple. The fact that this joint venture was established with an equal investment ratio was significant.

Of course, the joint venture was not straightforward. Apax was initially reluctant about the investment ratio, but through persistent negotiations, GCP eventually won out. Hori persuaded Apax’s representative, Alan Patricof, by saying, “I acknowledge that you are big, and we are small. But we have a vision and potential for the future. Just as you started small and grew to what you are today, we firmly believe we can do the same.”

With the joint venture established, GCP embarked on a journey to raise 20 billion yen. The introductions from Apax and the use of its name opened doors to investors worldwide. The VCs traveled across the United States, Europe, Asia, and Australia, conducting dozens of presentations. Eventually, they succeeded in raising the funds, and the investment activities of Apax GLOBIS Partners began.

GCP had started without any venture capital experience and learned through failure. Even so, the GLOBIS Incubation Fund had achieved significant results. Patricof knew that GLOBIS’s venture capital arm was still green, so he tasked Apax with teaching GCP “techniques and discipline,” as he put it. GCP members received training at Apax offices alongside local venture capitalists. Additionally, Apax had one or two members in Japan for several years after the joint venture’s establishment, sharing a wealth of knowledge.

The GCP team honed their skills through discussions with Apax. The investment committee required Apax’s approval, leading to intense debates with Patricof. The discussions were often fierce, with sharp criticisms and severe comments. The investment team had to present their ideas and persuade Patricof passionately, sometimes going back to re-investigate. The final test was always, “Do you have a gut feeling? Are you genuinely committed?” If the team could answer yes convincingly, the investment moved forward. The determining factor was always the investment team’s resolve.

Preparing for these rigorous debates led the investment team to conduct thorough investigations and think deeply about investment logic. Naturally, this solidified their strategies and post-investment support plans. Just as it had been with the investment ratio, GCP did not back down from Patricof’s strict stance, fighting through every challenge.

Following the partnership with Apax, GCP refined its investment techniques and established itself as a formidable venture capital firm..

Now with some accumulated experience and a global network, GCP raised 18 billion yen independently to launch GLOBIS Fund III in 2006. Although Japanese venture capital was a niche asset class globally, 80% of the investors in this third fund were from overseas. The early 2000s were the dawn of Japanese ventures, and GCP earned recognition and trust internationally.

However, this period of joy was short lived as the Japanese venture industry faced severe headwinds. The first blow came in 2006 with the Livedoor Shock, an accounting scandal that drastically tarnished the image of entrepreneurs. This was followed by the Lehman Shock in 2008. Just as the economy was beginning to recover, the Great East Japan Earthquake struck in 2011.

The impact of the Lehman Shock was particularly devastating. Many venture capital firms halted operations or withdrew, plunging the domestic venture industry into uncertainty.

Fortunately, GCP had already completed fundraising for GLOBIS Fund III. However, there was an investment strategy dilemma: Which industry sectors were the best to invest in, and what strategies were necessary to succeed? Were returns even possible in the deteriorating external environment? Venture capital activities were often a matter of personal skill. Over the past decade, GCP had believed that gathering talented individuals would lead to success. But now, the industry’s massive venture capital exodus meant a personalized approach risked the disintegration of GCP. This forced GCP to reconsider not only investment activities but also what kind of organization it should be.

Faced with various challenges, Kariyazono created the “12 Principles of Venture Capitalists,” a heartfelt document intended to provide GCP and its capitalists with a steadfast value framework. This manifesto was unveiled during a company retreat in 2009 and subsequently published on the website as guiding principles. By embodying these principles and empowering the younger generation to fully dedicate themselves to creating Japanese industries, GCP overcame the adversities of the Lehman Shock and the earthquake. The new direction resonated with other venture capitalists as well and came to be widely studied in training programs conducted by the Japan Venture Capital Association (JVCA).

Additionally, the words of seasoned overseas capitalists and investors became a source of support for GCP members during these tough times. They emphasized that investments typically slow during economic downturns, but the ventures that would emerge from such challenging conditions tended to grow robustly in the medium to long term. This insight encouraged GCP to pursue aggressive investments, backing solid companies with the potential for great returns.

GCP shifted gears from relying mainly on introductions to proactively approaching trustworthy entrepreneurs independently. One notable investment during this period was Oisix, a company in dire straits due to the inability to ship vegetables from Tohoku after the Great Tohoku Earthquake. Believing that they should support the struggling Japanese market rather than let it die, GCP decided to invest in Oisix. Between this and other investments, GCP invested about 1 billion yen within a month after the earthquake, issuing a press release to inspire the entire venture ecosystem.

The startups that received investments during this period, including Oisix, went on to thrive. Many achieved IPOs between 2013 and 2015, riding the tailwind of Abenomics.

GLOBIS Fund III was established in 2006. Generally, fundraising occurs in cycles of three-to-five years—the time needed to complete new investments from existing funds. However, fundraising for GLOBIS Fund IV began around 2012, after a six-year interval.

This extension was primarily due to the Lehman Shock. Though some economic fallout was inevitable, a proper fundraising effort was expected to attract capital. Hori, Kariyazono, and two new partners—Minoru Imano and Shinichi Takamiya—set a target of 12 to 15 billion yen for GLOBIS Fund IV (a lower target than its predecessor) and embarked on a fundraising journey across the United States. Back then, in the days before Zoom, fundraising meetings were conducted offline, often involving grueling schedules with multiple meetings in different parts of the country on the same day. Takamiya, responsible for scheduling and logistics, recalls it as “a death march.”

The result, too, was disheartening. After the Lehman Shock, overseas investors had significantly reduced their interest in venture capital investments, especially in the highly niche asset class of Japanese venture capital. Demonstrating the track record of the previous fund would have been beneficial, but GLOBIS Fund III had not yet yielded returns. Despite passionate assurances that the investments would soon bear fruit, the team was met with skepticism. Imano summarized the dismissive reaction: “‘Come back the day before yesterday,’ they said.” In some meetings, they were refused investment outright before getting the chance to present. Even existing investors declined further investments.

GCP, which had relied mainly on overseas investors since the second fund, found itself in a dire situation. The entire VC industry was experiencing a harsh winter with many firms withdrawing. By the end of GLOBIS Fund III, many VCs had exited the market.

It was domestic institutional investors who saved the day.

Some progressives had been researching Japanese venture capital since the early 2000s and had been in discussions with GCP for over a decade. Generally, institutional investors decide to invest after observing two or three funds. With GCP’s track record, the time was finally right. GCP’s sense of mission, especially during the post-earthquake investment period, was highly valued. These investors made the bold decision to support venture capital precisely because it was a challenging period. Although venture capitalists are known for their bold decisions to support startups, they also rely on the institutional investors.

After more than ten years building these relationships, GCP successfully launched GLOBIS Fund IV with investments from leading Japanese institutional investors, including the Organization for Small & Medium Enterprises and Regional Innovation, Japan.

But there were further challenges. A week before the final close, a slip of 500 million yen dragged the fund below 12 billion yen—the minimum target. This threatened the entire effort. GCP managed to secure the necessary commitments from investors, and in 2014, the fund closed at 11.5 billion yen. Thus, the arduous, two-year-long fundraising journey finally came to an end.

The fundraising environment was dire when GLOBIS Fund IV was established, and the entrepreneurial scene was far from booming. But as Kariyazono recalls, “Only those who were truly committed stayed.”

Two major entrepreneurial opportunities emerged during this period: the cloudification of software and the shift to smartphones. During the rise of cloud computing, companies like Money Forward and Freee, which provided enterprise cloud solutions (now known as SaaS businesses), were founded. GCP invested in Uzabase, which operates SPEEDA, an economic information service for enterprises. Investments were also made in SmartNews, a news app; Akatsuki in the gaming sector; and Mercari, a marketplace app in the commerce sector.

When GCP made its initial investments in SmartNews and Mercari, neither company had started monetizing. Both had exactly zero revenue. Their valuations were high, and the required investment size was significant for GLOBIS Fund IV. Both companies had plans for overseas expansion from their inception—an unusual strategy in the venture industry of 2013.

The investment committee had heated discussions: Would these startups be able to maintain traction after starting monetization? How would they compete with existing players? How should GCP consider the funding for overseas expansion? Was the risk too high?

During Mercari’s investment committee, Kariyazono remarked, “In every era, a startup emerges that symbolizes its time. After twenty years as a capitalist, I feel that in Mercari. It’s a once-in-a-decade company.” Similarly, Hori encouraged bold, unprecedented challenges in SmartNews’s investment committee, saying, “From now on, more ventures aiming for this kind of world will emerge. We want you to aim not just for Japan but for the world.”

Returning to the principle of supporting outlier entrepreneurs with grand visions, GCP was the lead investor in both companies. The resulting investments were outstanding. In the 2022 edition of the domestic VC performance benchmark survey conducted jointly by Preqin and the JVCA, GLOBIS Fund IV ranked first among all domestic VC funds over 10 billion yen since the survey began. This was a top-tier performance even by global standards.

In December 2012, the Abe administration announced the “three arrows” of Abenomics. This policy framework emphasized nurturing startup companies as a crucial part of Japan’s industrial revitalization. Bold monetary measures, along with various startup assistance programs, were tasked with supporting the initiative.

 JVCA, the industry’s representative body, was poised to be the platform for dialogue and unification. There were high expectations for JVCA to unify the then-fragmented venture capital industry. Unfortunately, then-president Kazunori Ozaki fell seriously ill during his term, making it difficult for him to continue. He called Kariyazono to his hospital room and named him successor. Despite the heavy responsibility and his existing role as partner at GCP, Kariyazono resolved to unite the industry’s future leaders. In July 2015, he became JVCA’s seventh president.

Though credited with driving innovation, the venture sector was sometimes viewed with suspicion by the general public in Japan. Entrepreneurs were seen as outsiders. However, as more successful ventures brought positive social influence, that began to change. Entrepreneurship started to become mainstream, with individuals from major corporations, financial institutions, and consulting firms beginning to start their own companies. Additionally, young people who experienced the Great Tohoku Earthquake were motivated to solve community issues through entrepreneurship, adding a social dimension to their business ventures.

With these favorable winds, many new VCs were established from 2013 onwards, leading to rapid growth in Japan’s venture ecosystem. Kariyazono remembered feeling as though “the mourning period had ended.” The term “venture” began to shift to “startup,” gaining broader acceptance and legitimacy.

GCP’s first fund back in 1996 was an experiment with early stage investment and startup management support in Japan. The second fund aimed to elevate investment activities and fund management to global standards through an equal joint venture with a major American venture capital firm. Despite the hard times during the Lehman Shock and the Great Tohoku Earthquake, GCP continued to evolve and inspire Japanese venture capital. 

In this context, the fourth and fifth funds, established in 2016 with a scale of 16 billion yen, represented a challenge for the second generation of partners.

GCP fundamentally hires inexperienced individuals and trains them to become capitalists on the job. Imano and Takamiya started out this way, became partners with GLOBIS Fund IV, and went on to lead GLOBIS Fund V, as well as manage the firm. They were particularly focused on organizational development. While venture capital performance is generally enhanced by maximizing the abilities, talents, and intuition of capitalists, overemphasizing these can jeopardize a firm’s sustainability. With GLOBIS Fund IV, GCP implemented the Initiative System, which encourages contributions to the firm and organization to enhance sustainability and scalability.

Another long-standing issue in Japan’s startup ecosystem was the lack of growth capital, resulting in few startups managing growth post-IPO. After going public, startups must have stable shareholders such as institutional investors. This requires solidifying core businesses while still private and preparing additional growth avenues. However, Japan’s market lacked growth capital at the pre-IPO stage, often forcing startups to go public prematurely. GCP believed Japan’s ecosystem would not evolve if this continued.

To enable investments of up to 5 billion yen per company, GCP boldly aimed for its sixth fund to double the size of its predecessor, targeting 40 billion yen. Takamiya recalls, “There were many criticisms questioning growth investment opportunities in Japan and whether there would actually be companies to invest in.”

There was similar skepticism during the fundraising process from investors on GLOBIS Fund VI’s concept and social significance. GCP responded with structural innovation, separating the main fund for new investments and a side fund specifically for additional investments during the growth phase. At last, GLOBIS Fund VI closed at 40 billion yen with the participation of many institutional investors. The fund met with many excellent startups and successfully incorporated them.

Supporting startup growth requires more than just capital. GCP X was established to support organizational development.

Since 2013, with the development of Abenomics’s startup ecosystem, the supply of risk capital in Japan gradually increased, and the number of entrepreneurs taking on significant challenges grew. The scale and vision of these startups required more robust support than ever before. GCP decided this called for a specialized team to support its portfolio companies. In the US VC industry, such “platform teams” were already standard.

In the search for a team leader, GCP met with Takehiko Ono. Ono had experience as an entrepreneur in residence at NetAge, a portfolio company of the GLOBIS Incubation Fund. He also had a twenty-year relationship with GCP and Kariyazono. With this background as an entrepreneur, manager, and headhunter, he was the perfect leader for GCP X, which officially launched in 2020.

In 2022, GCP embarked on fundraising for GLOBIS Fund VII. Building on the philosophy of GLOBIS Fund VI, the seventh fund focused on investing in startups that aimed to update Japan’s major industries and expand globally. The goal was to address markets and themes that could trigger the creation of next-generation industries. The target startups would need to grow into large companies—essential for Japan to escape its “lost decades.”

In March 2023, GLOBIS Fund VII achieved a final close at 72.7 billion yen. The largest-ever fund for GCP, it enabled investments of up to 10 billion yen per company. Reflecting on the GLOBIS Incubation Fund’s modest 540 million yen in 1996, this was a milestone in the growth of Japan’s startup ecosystem.

Newly appointed partners for this fund were Satoshi Fukushima and Emre Hidekazu Yuasa, both of whom started as inexperienced capitalists and gained experience at GCP. It is rare globally for a venture capital firm to have partners from a third generation.

GCP strengthened its investment and support activities with a focus on the global angle. Investments in deep tech startups, which had been limited since GLOBIS Fund III, now helped foster solutions from Japan. Additionally, GCP opened a new office in San Francisco to support the expansion of its portfolio companies and assist in recruiting executives for their overseas branches.

Coincidentally, the Japanese government declared 2022 the “first year of startup creation.” At the end of the year, it announced the Five-Year Plan for Startup Development. The government demonstrated its commitment with an unprecedented budget of approximately 1 trillion yen for startup-related policies.

In this environment, where both the public and private sectors must unite to promote startups, GCP continues to take on new challenges that contribute to the growth of Japan’s startup ecosystem.