Japanese regional banks support start ups

Mondo Health Updated on 2024-02-19

According to the Nihon Keizai Shimbun, Japan's regional banks are taking risks for the growth of start-ups.

According to the report, in mid-December 2023, the Japanese start-up Toregem Biopharma conducted a preliminary consultation with the National Pharmaceutical Review Agency to make a tooth medicine.

The Kyoto University-incubated company wants to challenge the world's first** drug for congenital tooth loss, allowing patients to grow teeth after a single injection.

Is this really possible? It would be awesome if it could be realized. "In April 2021, Bank of Kyoto invested 10 million yen (about 6. ) in the company, which has only been established for one year, through **$70,000). **Ryo Fukuoka, head of the venture capital department of the management company, is very optimistic about the company's potential.

Bank of Kyoto was able to take on the risk because it held 850 billion yen in book earnings, the most of any regional bank in Japan. It has a successful track record of investing in today's multinational conglomerates Kyocera and Niedeck, which are now multinational corporations, and understands the importance of investing in emerging industries better than other local banks.

However, there have been few multinational corporations in Kyoto since the 90s of the 20th century. In order to nurture companies that can take on the future, the local government has set a plan to increase the cumulative total amount of start-ups to 54.5 billion yen by 2031, which is 12 times the current amount.

We will invest in ultra-high-risk projects. "In October 2023, Higo Bank, headquartered in Kumamoto Prefecture, established seeds with a total amount of up to 200 million yen**. This ** is mainly for seed-stage projects that are difficult to finance because they have not yet been commercialized, which is rare in Japan.

Without the creation of new industries, the local economy will shrink. Takeshita Shugo, a senior executive at the Higo Bank Group, said he already had a sense of crisis: "If this continues, young people will be sucked out of Fukuoka, which is full of startups." ”

If the investment company receives capital gains through listing, etc., up to 5% of the proceeds will be returned to the university that developed the technology. In this way, a reward mechanism has also been formed for universities to seriously incubate start-ups. In the future, the ** will also cooperate with 9 other universities.

But financing and investing are completely different things. Localities are also facing the problem of not having enough investment talent. "To be honest, if we don't give it a try, it's hard for us to judge whether the project has a future and whether it can grow with it," says Takeshita. "For the sake of the future of the local economy and the bank, the challenge of risk has begun. (Compiled by Li Ziyue).

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