Japanese lender MUFG to launch $300m fund to back late-stage startups

FILE PHOTO - People walk past a branch of Mitsubishi UFJ Financial Group's bank of Tokyo-Mitsubishi UFJ (MUFG) in Tokyo, Japan, May 16, 2016. REUTERS/Thomas Peter/File Photo

Mitsubishi UFJ Financial Group Inc (MUFG) will launch a new $300 million fund to offer debt financing to late-stage tech startups in the Asia-Pacific region, its chief executive said, as Japan’s largest lender seeks to tap opportunities in growing economies.

The move comes amid a fundraising frenzy in Asia as the number of unicorns, or privately held startups with a valuation of more than $1 billion, has swelled.

The new debt fund will be created early next year through Mars Growth Capital, a Singapore-based joint venture between MUFG and Israeli financial tech firm Liquidity Capital, Hironori Kamezawa told Reuters in an interview.

MUFG will make a $300 million capital commitment to Mars, which will provide debt financing to startups in later stages of growth including unicorns.

If the investee firms eventually choose to go public, MUFG plans to support their initial public offerings with its U.S. alliance partner Morgan Stanley, Kamezawa said.

The fund’s financing decisions will be based on Liquidity Capital’s artificial intelligence-driven credit scoring model that forecasts future earnings and cash flow of a startup from real-time financial and accounting data.

“We’ve seen immense needs from startups for debt financing” as a way to raise funds without reducing existing shareholders’ ownership, Kamezawa said.

“It’s usually difficult for us bankers to extend loans to those startups in the red, but the Israeli firm’s credit scoring model has helped us out,” he added.

It will be Mars Growth Capital’s second debt fund. The first fund, set up last year, is focused on early-stage startups and currently has a $200 million capital commitment. Mars Growth Capital has so far clinched financing deals with 11 companies, according to MUFG.

Reuters

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.