SoftBank enters into new partnership with Yahoo Japan

Yahoo Japan puts $20M into SoftBank fund, while SoftBank helps find U.S. companies to invest

SoftBank Capital, the venture group affiliated with Japan’s Softbank Corp., has entered into a new partnership with Yahoo Japan, it was announced Wednesday. 

As per the partnership, Yahoo Japan will be contributing an additional $20 million to SoftBank Capital’s early-stage Technology Fund ’10, bringing the fund's total to $120 million. The fund is a compliment to SoftBank's $250 million PrinceVille Investments, L.P. fund, which us designed to help growth-stage entrepreneurs and their businesses compete in, and expand into, Asia. The firm closed the fund in February.

"SoftBank has always had a close relationship with Yahoo Japan," SoftBank Capital partner Joe Medved said in an interview with VatorNews. "We have acted as the eyes and ears for Yahoo Japan in the United States."

Indeed, Yahoo Japan, which was formed in 1996, was formed as a joint venture between Yahoo and SoftBank.  Now, with this partnership, SoftBank will be assist Yahoo Japan with forming relationships with U.S. companies that wish to do business in Japan, as well as helping them assess investment opportunities.

To faciliate the company's overseas investments, Yahoo Japan also announced that it was naming Toshiaki Chiku as its head of U.S. operations. He will be overseeing investments and partnerships, while working out of SoftbankCapital’s Manhattan office.

“Yahoo! JAPAN is making a big effort to expand our venture capital impact in the United States, and we are firmly committed to helping companies at all growth stages get into the Japanese market,” Chiku said in a statement. “Japan can be challenging for many U.S. companies, and given our scale and affiliation with SoftBank Corp., we’re in a great position to help them grow and succeed.”

The additional money that is being invested into Technology Fund ’10 will help the firm bring the fund from 35 investments to 50. The two companies are going to be looking to invest in companies in the mobile applications, social media, e-commerce, online advertising, gaming and cloud computing spaces. These spaces, Medved told me, have great potential to flourish in Japan.

When it comes to consumer mobile, for example, it is a lot easier to go abroad then it used to be, he said, as there are a number of English-speaking early adopters, and the apps can be translated into Japanese, as long as the developers have a local partner to work with. And there is no better partner than Yahoo Japan, since it reaches 80% of Japan on a monthly basis.

For ad technology, there is great potential for the U.S. to assist Japanese companies. 

"They are very advanced in their infrastructure, speeds, access and distribution," Medved said. "But the U.S. leads in software, and has seen more innovation in ad technology." 

And when it comes to e-commerce, Yahoo Japan is the largest in the Japanese market, and is interested in the U.S. models and tools, to bring better solutions and logistics.

At the same time, U.S. companies are looking to grow internationally, and Japan would be a great partner, not only because it is one of the largest economies in the world, Medved said, but it also has a very close proximity to China, another emerging economy. 

Founded in 1995, some of the SoftBank Capital has three funds: the Technology Fund ’10, which now has $120 million in capital; the PrinceVille Investments fund, with $250 million; and a New York State fund, which Medved could not say how capital it had.

The firm's recent exits include Buddy Media, which was acquired by Salesforce for $689 million in June; Hyperpublic, which was acquired by Groupon in February 2012; Huffington Post, which was acquired by AOL in February 2011 for $315 million; and OMGPOP, which was acquired by Zynga for $200 million in March.

Some of SoftBank's other investments include pariticpation in a $30 million investment in Cheezburger, a $200 million cash infusion for InMobi; a $147 million investment in Zynga; participation in a $19.3 million Series D round for Buzzfeed; and particpation in a $3 million in Series A funding round for BestVendor.

Softbank Capital maintains active offices in New York City, outside of Boston and Northern California.

(Image source: https://techcrunch.com)