Japanese VC firm Global Brain to start investing in ICOs

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Global Brain, one of Japan’s largest venture capital firms, is doubling down on the blockchain industry with a new entity that will conduct research and participate in ‘initial coin offerings’ or ICOs – a type of blockchain-based crowdfunding that was recently banned in China.

The new subsidiary, dubbed Global Brain Blockchain Labs Corporation (GBBL), will complement the Japanese VC fund’s investment activity in the blockchain space, which includes backing Singapore-based Bluzelle and Filipino remittance and payments startup Coins.ph.

“With the recent movement of initial coin offerings, Global Brain looks to support blockchain startups from equity finance to ICO in order to pursue and create a hybrid financing structure for the startup’s growth,” said the company in a statement.

This year alone, startups worldwide have been able to raise more than US$1 billion through ICOs, according to industry publication CoinDesk. It’s a fast way to raise capital – millions of dollars have been raised within minutes – without giving away any equity. By offering startups both options, the Japanese venture capital firm may be able to offer blockchain startups the best of both worlds.

See: Everything you wanted to know about initial coin offerings but were afraid to ask

Equity-based financing of blockchain startups will continue through Global Brain’s main fund, which has US$500 million worth of assets under management. Donations, sponsorships, and participating in token crowdsales, however, will be carried out separately through GBBL. Those funds will come from Global Brain’s own proprietary capital.

According to Takashi Sano, venture partner of Global Brain, the Japanese VC fund will invest up to US$5 million in blockchain startups per round. The new subsidiary does not have a specific amount allocated for token crowdsales – funding will be decided on a project-by-project basis.

Besides financing, GBBL also plans to conduct studies on blockchain-related topics, such as the structure of ICOs, and help startups connect to relevant corporate and government partners. The aim will be accelerating the creation and deployment of real-world blockchain applications.

Several blockchain startup founders will sit on GBBL’s advisory board, including Kai Cheng Chng from Singaporean digital gold startup Digix, Jun Hasegawa, CEO and founder of OmiseGO, and Ron Hose, CEO and founder of Coins.ph.