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Incubate Fund Asia, a sector-agnostic Japanese venture capital fund, has announced the first close of its third fund, which has a target corpus of $50 million (around Rs 416 crore).

This is the third fund from the Japanese VC in India, which specialises in seed-stage investment. The proceeds of the fund will be used to make early-stage investments and also for follow-on investments in startups that have shown strong fundamental growth.

The third fund aims to build a portfolio of around 20 startups. It will invest only 40% of its total investible corpus to create the portfolio and then use the balance to back the ‘winners’ in its portfolio.

According to the statement by the company, Incubate Fund’s India-focused entity has now been rebranded as Incubate Fund Asia and aims to expand its focus on supporting pre-seed and seed-stage startups in India and Southeast Asia (SEA).

Incubate Fund Asia was founded and has been led by Nao Murakami, Founder and General Partner of the fund, with support from Incubate Fund’s Japan team. 

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“With the target fund closure of $50 million, we will be ready to significantly enhance our support to emerging ventures, driving sustainable growth and innovation. Incubate Fund Asia remains deeply committed to its vision of nurturing innovation and catalysing the growth of startups, ultimately contributing to the development of a thriving entrepreneurial ecosystem across Asia,” added Murakami.

With a history of nurturing over 200 startups in Japan and Asian regions, it expanded to India in 2016 and started Incubate Fund India, which was rebranded recently as Incubate Fund Asia. It actively engages with startups, offering hands-on support and mentorship, making them a vital partner for entrepreneurs. Incubate Fund Asia takes on a prominent role as a lead investor by committing a substantial 80% of its funds to Indian startups. 

The fund has supported 27 Indian companies, including notable ventures like ShopKirana and Captain Fresh. The contributions made by Incubate Fund Asia are pivotal in advancing business digitisation and innovation, consistently investing in the $500K to $1.5 million range. In the year 2019, Incubate Fund launched a $18 million Fund II.