Exclusive: Japanese gamemaker Akatsuki launches $20m fund to back Web3 projects in Asia

Japan-based Akatsuki has launched a US$20 million crypto-focused fund to invest in Web3 projects, particularly in Asia, which the digital entertainment company describes as “an important Web3 market.”

Called Emoote, the corporate venture capital fund was established in Singapore in 2021 and has already started deploying its capital. Among the companies it has invested in are StepN, a move-to-earn running app, and BreederDAO, a GameFi factory of non-fungible tokens.

“We started our crypto investment last year, and we’ve already invested in more than 20 projects with tokens,” Yuji Kumagai, Emoote’s co-founder and general partner, tells Tech in Asia.

Visual of Emoote

While Asia-based projects and companies account for half of the fund’s current portfolio, 40% are based in the US while the remaining 10% come from other regions. Going forward, it will focus on Asia while keeping a global mindset.

Emoote, which typically cuts checks worth around US$300,000, will be eyeing deals in the field of Web2 tokenomics, which are Web2 companies experimenting with crypto tokens. The fund is also targeting prospects in IP creation as well as NFTs and digital fashion.

“We believe that digital fashion is likely to surpass physical fashion as a business as people increasingly spend more time in the virtual world,” Kumagai says. Apart from playing games and signing up for other forms of entertainment, people are also joining digital activities “where physical constraints are removed,” such as social media and metaverses.

Gaming expertise

Akatsuki, which went public on the Tokyo Stock Exchange in 2016, is a well-known maker of mobile games in Japan and Taiwan. It has previously launched other VC funds, namely AET Fund1 and Heart Driven Fund2.

Its Web3-focused fund comes as Akatsuki has formed a partnership with one of the sector’s biggest and most successful names, Yield Guild Games (YGG), which entered Japan earlier this year.

In fact, Emoote believes that the success of YGG and its peers has put Asia on the map for investors, as it will give rise to more promising Web3 projects in the region.

However, the crypto scene is on rough seas now following a recent plunge in cryptocurrency prices, which has caused a slump in the price and transactions of even blue-chip NFTs.

For the companies and projects it invests in, Emoote says it will be able to leverage the networks and expertise of its parent company to further enhance their value. Akatsuki will help these companies by providing marketing and business development support in Japan and Asia. The firm will also open up access to Japanese entertainment IP and creators while offering know-how in the fields of entertainment and media.

With its track record of working with many creators to develop entertainment and media, Akatsuki wants to go beyond being just an investor. It sees itself as a group that pushes “emotional value” in the Web3 era, which plays an important role in the emerging industry’s incentive economy.

“We believe that NFT consumption based on emotional values such as likes and empathy is a very important mechanism that will provide the motivation upon which tokenomics can grow soundly,” explains Kumagi. This, in turn, will be critical in achieving “sustainable growth of the token-centered economic zone.”