TOKYO-Targeting one of the most advanced mobile markets in the world, foreign and local venture capitalists are pouring money into Japanese mobile companies.
H&Q Asia Pacific, one of the oldest and largest venture capital firms focused on the Pacific Rim, has invested approximately 1.7 billion yen (US$14.6 million) into Access, the inventor of c-html, the browser for NTT DoCoMo’s i-mode wireless Internet service. Intel Corp., a leading high-tech firm based in the United States, invested 100 million yen (US$861,000) in Cybird, a leading content provider for i-mode.
In addition, Japanese mobile carriers have set up their own venture funds or have participated in U.S venture funds for nurturing technology necessary for their mobile services.
H&Q Asia Pacific is a U.S.-based venture capital firm focusing on the Asia-Pacific region. In Japan, H&Q is targeting mobile and media companies. H&Q Japan assumed about a 20-percent stake in Access by investing a total of 1.7 billion yen in 1998. Access is well known in the mobile market due to its c-html technology used for i-mode. As a next step, Access is developing a next-generation browser based on x-html that NTT DoCoMo will employ for its third-generation (3G) services.
Pierre Suhandinata, vice president of H&Q Asia Pacific Japan, said the company has been helping Access for the past two years in tailoring its strategies, improving its operation and finding international partners.
Under the initiative of H&Q Japan, for instance, Access set up Mobile Business Communications with CTC, a subsidiary of Itochu and Broadvision, a leading Internet service company. Mobile Business Communications plans to announce a new service and business alliance in the mobile industry within a couple of months.
But one of the largest contributions of H&Q is providing financial management staff to Access to help it through the initial public offering (IPO) process. Access launched an IPO on Mothers, a new division for start-ups on the Tokyo Stock Exchange, on 26 February.
But Access is only one channel of H&Q’s investment in Japan. According to Suhandinata, H&Q is planning to invest US$200 million in mobile and media companies during the next two years.
Cybird, a leading content provider for i-mode, last year won 100 million yen in funding from Intel. The company called it the largest investment by a major U.S. investor in a Japanese start-up.
Using the fund, Cybird last year set up a research and development (R&D) center for Java and 3G technology. Yoshitake Hatada, director and chief development officer of K-Laboratory, said the laboratory will provide attractive content for Java and 3G services.
Meanwhile, Japanese carriers have set up venture capital firms as part of their efforts to nurture the technology necessary for their mobile services.
NTT DoCoMo in November 1999 set up a venture capital company called Mobile Internet Capital with Internet Research Institute, Kogin Shoken and Ikuo Nishioka, the former chairman of Intel. The first fund with 6.5 billion yen (US$56 million) was set up in February 2000, and the firm started investment targeting 3G technology, high-speed data transmission technology, home automation and next-generation network machines and devices.
In March 2000, Mobile Internet Capital also tied up with six major venture capital firms in Europe and established the Wireless Internet Venture Association (WiVa). The WiVa will jointly construct databases for mobile firms and technologies.
Japan Telecom, the third-largest telecom company in Japan, last month invested in U.S.-based venture capital firm BayPartners as part of its effort to develop new technology for 3G services.
