Japan’s MUFG taps Israeli AI to hunt for unicorns in Asia

New signage for MUFG Bank Ltd., the main banking unit of Mitsubishi UFJ Financial Group Inc., is displayed in front of the bank's headquarters in Tokyo, Japan, on Sunday, April 1, 2018. Photographer: Akio Kon/Bloomberg

Japan’s MUFG Bank will use artificial intelligence to screen Asian startups for financing, looking beyond balance sheets to forge relationships with promising businesses who otherwise may not yet qualify for bank loans.

MUFG Bank will launch a 50-50 joint venture in Singapore with Liquidity Capital, an investment fund based in Israel that has a track record of incorporating AI into its operations. The venture will house a $80 million fund, financed entirely by MUFG Bank, which will start operating by the end of the year.

The fund will finance e-commerce, education and health care startups. Using AI, the fund will analyze companies’ bank accounts, subscription numbers, accounting data and other information to screen them for loans. Such a comprehensive screening process is still rare, MUFG Bank says.

Startups often fall into the red as business expands. Because banks usually make decisions on loans based on corporate balance sheets, this makes it difficult for them to receive financing.

MUFG Bank, a flagship unit of Japanese megabank Mitsubishi UFJ Financial Group, hopes that its new AI-based operation will help it cultivate relationships with up-and-coming businesses in Southeast Asia and India early on.

The group is already working on expanding beyond conventional banking in emerging Asian markets. MUFG Bank is investing about 78 billion yen ($740 million) into ride-hailing startup Grab as early as this year, and will launch joint, smartphone-based financial services.

This article was first published on Nikkei Asian Review.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.