#Japan #Startup Investment #Minato #Kepple Group #Direct Secondary

Kepple Group's New Fund and its Impact on the Startup Ecosystem

Kepple Group, led by CEO Takahiro Kamisaki, has successfully launched the "Kepple Liquidity Fund II," focusing on direct secondary investments, raising an impressive ¥6.1 billion in its first closing. This fund aims to address the pressing issue of liquidity in Japan's startup ecosystem, which has been facing significant challenges despite a surge in new capital inflows into the market.

The Challenge of Liquidity in Japan's Startup Market

In recent years, the Japanese startup investment landscape has expanded rapidly, attracting substantial capital. However, the absence of liquidity for unlisted equities remains a major hurdle that investors and startups alike must navigate. The concept of direct secondary investment, championed by Kepple Group, involves purchasing equity stakes in startups from existing shareholders, offering a viable solution for early investors to liquidate their assets at opportune times.

These transactions not only provide immediate returns but also allow the proceeds to be reinvested into new innovations, revitalizing the cycle of investment within the ecosystem. Furthermore, startups that transition ownership through these sales can secure the time necessary for growth, aiming for higher valuations during their initial public offerings (IPOs) or sustained business expansion.

Building on Success: The Track Record of Fund I

The initial fund, "Kepple Liquidity Fund I," launched in 2022 with a total capital of ¥10 billion, has executed around 50 transactions amounting to approximately ¥7 billion over three years. It has successfully acquired equity in 23 startups, with notable exits including IPOs for companies like Liberaware, Kurashiru, and Axelspace Holdings, alongside a merger acquisition with Credit Engine. Such accomplishments demonstrate the fund’s efficacy in facilitating liquidity for unlisted equities and supporting the growth of promising startups.

As a dedicated direct secondary fund targeting domestic startups, Fund I executed transactions with flexibility and agility, catering to the diverse needs of existing shareholders. The scale of this fund has allowed it to contribute significantly to liquidity events, with individual transactions exceeding ¥100 million and equity ratios surpassing 15%.

Looking Ahead: Fund II's Goals and Strategies

Looking towards 2025, the need for secondary markets in unlisted equities is expected to become even more pronounced, driven by several factors. As VC funds founded during the growth surge of the mid-2010s reach maturity and exhibit increasing numbers of closures, and as business companies that have been actively investing in startups since around 2020 restructure their portfolios, the demand for liquidity is anticipated to rise.

Additionally, as the entrepreneurial ecosystem matures, founders and employees will increasingly seek opportunities for asset liquefaction, reinforcing the necessity for funds like Kepple Liquidity Fund II. With a diverse group of investors aligned with its philosophy, this second fund aims to surpass its predecessor in size and impact, providing existing shareholders with flexible liquidity options while supporting startups' ambitions to achieve higher valuations during growth stages.

Fund Overview

• - Fund Name: Kepple Liquidity Fund II
• - General Partner: Kepple Group Inc., Takahiro Kamisaki, Yasushi Dome
• - Investment Period: June 2025 – December 2032

About Kepple Group

Kepple Group, headquartered in Minato, Tokyo, is dedicated to creating new industries, contributing to the startup ecosystem's development through various initiatives, including:

• - Investment Operations: Managing secondary funds like the Kepple Liquidity Funds and succession funds.
• - Fund Support Services: Providing back-office support such as fund settlements, capital management, and investor reporting.
• - Open Innovation Support: Utilizing resources like the KEPPLE DB for exploratory and advisory services.
• - Startup Support: Offering recruitment and BPO services to assist with core business needs.

For more information, visit Kepple Group's Website. Inquiries regarding each service can be made through the dedicated service pages or contact forms.