SDF Capital Establishes Second Startup Debt Fund

SDF Capital Co., Ltd. (Headquarters: Minato-ku, Tokyo; Representative Director: Takumi Fukuda) is pleased to announce the establishment of the "Startup Debt Fund No. 2 Investment Limited Partnership" (hereinafter, "Fund 2") and its first close at approximately 5 billion yen. Kiyo Bank, Ltd., San-in Godo Bank, Ltd., Regional Economy Revitalization Corporation of Japan (REVIC), Tokai Tokyo Investment Co., Ltd., and Fukoku Mutual Life Insurance Company have participated in this fund *1. Fund 2 aims to raise a total of 20 billion yen and will focus on responding to the growing demand for M&A funding, utilizing enterprise value collateral, and providing investments and loans to late-stage startups. *1 In alphabetical order, some investors are undisclosed. ■ Background In startup fundraising in Japan, the need for startup debt, an alternative to equity, is expanding. In addition, external environmental changes such as the raising of listing maintenance standards for the Tokyo Stock Exchange Growth Market and increased attention to non-continuous growth through M&A are also observed. Our company established Japan's first *2 independent startup debt fund in 2022 and has provided cumulative investments and loans totaling approximately 9.3 billion yen across 40 cases over the past four years. Leveraging these achievements and expertise in supporting startups, we have established Fund 2 to support the recent funding needs and growth strategies of startups. *2 This is the first independent debt fund in Japan exclusively targeting startups under the Special Business for Qualified Institutional Investors, etc. (so-called professional fund). (Based on SDF Capital's research of funds listed in the Financial Services Agency's "Status of Professional Fund Notifiers (Qualified Institutional Investors, etc. Special Business Notifiers) [Fund List]" as of March 31, 2022, as of May 24, 2022). ■ Fund 2 Details With the mission of "providing diverse options for startup funding," this is Japan's first *2 independent startup debt fund. The "Startup Debt Fund No. 2 Investment Limited Partnership" will contribute to the growth and development of startups by expanding the following four key areas of support, in addition to conventional growth capital investments and loans: ・Provision of M&A funds: Support for M&A funds aimed at maintaining listing or expanding business. ・Enterprise value collateral: Realization of investments and loans focused on the business viability of startups. ・Large-scale investments and loans for late-stage startups: Execution of large-scale investments and loans for late-stage startups, such as those just before IPO. ・Nurturing regional startups: Implementation of collaborative support with regional financial institutions that are LPs. Name: Startup Debt Fund No. 2 Investment Limited Partnership Total Fund Size: Up to 20 billion yen Investment Target: Domestic middle to late-stage startups Unlimited Partner: SDF Capital Co., Ltd. ■ Comment from Takumi Fukuda, Representative of SDF Capital Since establishing Fund 1 as Japan's first independent startup debt fund, we have gained extensive experience and are now able to establish Fund 2 and achieve its first close. First and foremost, I would like to express my sincere gratitude to the investors who have continuously supported us since Fund 1, and to the new investors who have joined us, agreeing with the philosophy of this fund. I am deeply grateful for your long-term support in the new field of startup debt. Furthermore, we are proud that the entrepreneurs we have partnered with as investees of Fund 1 have achieved strong growth in their respective fields. In recent years, private debt has established its presence globally as an asset class that generates stable returns, and its importance is increasing even further in Japan. As a key player in startup debt in Japan, we have dedicated ourselves to the development of this field since our inception. With Fund 2, we aim to further deepen our collaboration with LP investors, building on the achievements and expertise we have cultivated so far. By responding to diverse needs such as M&A support, utilization of enterprise value collateral, and investments in late-stage startups, we intend to generate sustainable and stable returns and, in turn, contribute to the development of Japan's startup ecosystem. ■ About SDF Capital Co., Ltd. Name: SDF Capital Co., Ltd. Location: Sumitomo Fudosan Toranomon Tower 16F, 2-2-1 Toranomon, Minato-ku, Tokyo Established: November 2021 Representative: Takumi Fukuda, Representative Director and President Business Description: Operation of startup debt funds URL: https://www.sdf-capital.com/ *Company names and trademarks mentioned are...