Mizuho Financial Group, one of the largest financial institutions in Japan, has announced the launch of a new, 14.3 billion yen ($97 million) debt fund for startups, with backing from seven financial institutions.
The fund, Upsider Blue Dream Growth Fund 2, aims to meet growing demand for alternative financing among growth-stage companies, per the announcement. It followed the launch of a 10 billion yen first fund in November 2023.
Mizuho said the fund, co-managed with Tokyo-based payments startup Upsider Inc., closed with investment from seven Japanese financial institutions, namely, Kyoto Capital Partners, San-in Godo Bank, Bank of Nagoya, Hiroshima Bank, Fukuoka Bank, Fukoku Mutual Life Insurance, and Mizuho Bank.
The fund targets startups in their growth stage, offering loans of up to ¥1 billion per company. It uses Upsider’s AI-driven credit assessment technology and Mizuho’s lending expertise to provide financing decisions and funding in as little as one week.
Mizuho and Upsider said the fund builds on the experience of their first joint venture, aiming to deliver faster and more flexible funding solutions for startups.
The partners plan to expand the open platform by attracting additional domestic and international investors.
Private credit has proven to be a softer cushion for an institutional portfolio that still can deliver cash in the current high-rate environment.
The strategy has outperformed bonds and continues to deliver steady returns of 8.4% in 2024, per the latest Preqin benchmark report.
The launch of the credit fund for startups comes amid a growing funding landscape in Japan, where an increasing number of startups are securing capital recently.
Last month, Wada FoodTech, a Tokyo-headquartered hot-chain decentralised foodservice platform, raised $5 million in a pre-A3 funding round to fuel its expansion plans.
Last last year, Japanese property technology startup estie inc. also announced raising 2.8 billion yen (about $20 million) in its Series B funding round co-anchored by Singapore venture capital fund Vertex Growth and the Development Bank of Japan.
