This new $96M fund backs Japanese startups outside Tokyo

In 2009, as the financial crisis convulsed around the globe, Japan poured JPY 20 billion (about US$218 million at contemporary forex rates) into a public-private organization responsible for propping up struggling businesses throughout the country. With its five-year mandate ending, the Regional Economy Vitalization Corporation of Japan (REVIC) is changing its mission in order to support startups instead.

Nikkei reports that a total of JPY 13.3 billion (US$96 million) is now earmarked for startups. Preference will be given to firms in healthcare and tourism.

Those categories are often cited as important for supporting communities in Japan’s countryside. The population there is rapidly ageing, and younger folks are not sticking around to pick up the slack. The result is that tourism becomes a major part of the nation’s economic future.

The creation of a new fund for startups is always welcome news but there is a serious question of whether or not there are sufficient startups to receive the money. In the past several weeks, the Tech in Asia team has been traveling across the country looking for startups and entrepreneurs outside of Tokyo. We’ve met a lot of amazing individuals and exciting companies but they almost all have one thing in common – they want to come to Tokyo.

Yet, there is now US$96 million in gleaming capital available for entrepreneurs looking to grow businesses outside of the capital. Local tech ecosystems need entrepreneurs but they also need cash. REVIC is doing its part for the latter and now it must wait to see if anyone will answer the call.

So far it has found one recipient: CarePro, an affordable health care alternative for people who cannot afford standard healthcare. Terms of the investment were not disclosed.

See: These major Japanese banks want to give $30M to startups. But their plan could be misguided