Japan’s AET fund to inject $500k in 5 Indian vernacular segment startups

AET Team: L to R (Yuki Kawamura, Tomoya Ogawa)

Akatsuki Entertainment Technology (AET) fund, a Japanese venture capital (VC) fund, launched in India in March, is looking to make five new early-stage investments in the vernacular segment in India with an average ticket size of $500,000, according to the funds’ top executive.

AET has already made 10 early-stage investments in India since its launch in March with its $50 million corpus fund for India. It has already invested in startups such as Doubtnut, Planet Superheroes, LBB, Mech Mocha, and others.

The Japanese VC firm follows a co-investment model and typically closes partner deals with other VCs such as Accel Partners, Blume Ventu]\[

es, Sequoia, Inventus, Chiratae, DSG, 3one4, Infoedge, and Shunwei.

The fund’s principal partner Yuki Kawamura told Mint that consumer segments including vernacular video, vertical media, esports, mobile gaming, live streaming, among others will be Akatsuki key focus areas in India.

India’s vernacular content market is currently seeing an upsurge in terms of investments and monthly user growth. However, according to AET’s Kawamura and several other investors, the vernacular content segment in India is largely unexplored with a tall demand-supply gap in the marker.

“…(while India’s) regional vernacular audiences are now starting to consume digital content, the absolute volume (and also quality) of content in their languages is insufficient (most content are English). This is the reason why we see India (as a more investable opportunity) over other regions like Europe,” added Kawamura.

Kawamura also said that although Akatsuki focus is on vernacular, it will, however, have no bar on the consumer segment it might invest in.

Although a majority of Akatsuki investments are in the content and discovery space, it has also invested B2B e-commerce startup ShopKirana. “We will invest across segments including in content, media, lifestyle and entertainment startups with near term focus on vernacular content,” added Kawamura.

His fund has so far made over 30 investments till data including in Japan, India, and the US since Akatsuki inception in 2017. And Kawamura says that his fund is also open to collaboration within its portfolio brands.

“AET Fund is a pure financial play vs. strategic investment (fund). Hence if we see there’s an opportunity to increase the value of portfolio companies by collaborating together, there’s no reason to not doing it,” said Kawamura in an email interview.

Akatsuki fund is committed to closing deals worth at least $1.5 million in seed to early stage startups, with an option of follow-up investments. “We’re seeing good traction from our current portfolio, so we are likely to raise our next fund in the next two-three years.

Also, now we see so many opportunities in content, media and entertainment space in India, we’re considering to start our own business in this verticals as a part of Akatsuki’s operating team. Which should have a synergetic effect with our portfolio companies,” added Kawamura.

This article was first published on livemint.com