Japanese financial services company Mitsubishi UFJ Financial Group (MUFG) has established a new venture capital firm, called MUFG Innovation Partners (MUIP), to make investments across fintech startups.
MUFG establishes MUFG Innovation Partners. Photo: courtesy of Tokumeigakarinoaoshima/Wikimedia Commons.
MUFG said that the new entity will manage its corporate venture capital funds to fast track open innovation and consolidate partnerships in the fintech sector.
The new unit will launch a JPY20bn ($185m) fund, dubbed MUFG Innovation Partners No.1 Investment Partnership, later this month.
The fintech fund, which is backed by commitments from the MUFG Group entities, will promote strategic investments in fintech related startups. It will also be used for creating business synergies between the company and the startups.
The company, in a statement, said: “The financial services industry is being transformed by FinTech related startups that have scaled up rapidly and have raised substantial amounts of capital from financial and non-financial institutions.
“While the MUFG Group entities have previously made separate strategic investments in FinTech related startups, a larger, collaborative and more sophisticated framework for strategic investments is needed by MUFG in order to adapt itself to rapid marketplace changes and enhance open innovation.”
The financial services firm revealed that MUIP will make use of “The Investment Specialized Subsidiary” status under the Japanese Banking Act, which enables it to acquire more than 5% stakes of investees under certain conditions.
MUIP, which has been allotted with a capital of JPY500m ($4.62m), has developed its team by recruiting venture capitalists and other professionals who have experiences of working with and investing in Japanese and global startups.
Headquartered in Tokyo, MUFG provides a range of financial services such as commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing across the world through its various divisions.
In last November, the company’s subsidiary MUFG Union Bank made a deal to acquire Intrepid Investment Bankers, a regional middle market investment banking firm based in Los Angeles, US, for an undisclosed price. Intrepid Investment Bankers offers mergers and acquisition, capital raising and strategic advisory services to entrepreneurs and middle market companies in multi-sectors.