Japanese private equity firm D Capital said it has racked up 67 billion yen (about $445 million) for its second buyout fund, which drew support from domestic and overseas investors.
The Tokyo-based lower middle-market PE firm said D Capital II was oversubscribed. In 2023, D Capital raised about $238 million for its maiden fund, which was led by insurance companies and banks.
Founded in 2021, D Capital focuses on lower middle-market buyouts in Japan, with a strategy centered on digital transformation (DX).
The firm said it leverages a network of in-house and external digital professionals, including software engineers, data analysts, and business designers, to support SMEs in adopting technology and driving operational improvements.
“We look forward to continuing to connect people, technology, and capital to promote the growth of SMEs in Japan,” the company said in a statement.
The new funds will reinforce the firm’s collaboration with its so-called ‘DX Guild’, a team of about 40 experts in business, data science, and engineering that work closely with portfolio companies to enhance value creation, per the announcement.
D Capital said it will continue to support Japanese SMEs by integrating technology, capital, and expert insights to strengthen management foundations and spur growth.
The PE firm, which specialises in digital transformation, was spun out from Japan’s investment company Unison Capital in March 2021.
Its portfolio companies include Francfranc, a retailer of interior and miscellaneous goods; FC Standard Logistics, an international freight forwarder; The Oyatsu Company, a manufacturer and seller of savory snacks known as Baby Star; among others.
D Capital’s successful close comes as the Japanese PE market heats up with an influx of Chinese investors.
In January, Hillhouse Investment Management acquired Tokyo-listed real estate firm Samty Holdings for 169 billion yen ($1.1 billion) and delisted the company from the Tokyo bourse in January.
FountainVest Partners, too, paired up with Japan’s Unison Capital to acquire Japanese premium pearl jewelry brand Tasaki & Co. for about 100 billion yen from MBK Partners in November 2024.
