CVC industry group FIRST CVC announces “Japan CVC Survey 2022”, a comprehensive survey of CVC activities by operating companies

LLC Blue Circle
FIRST CVC announces “Japan CVC Survey 2022”, a comprehensive survey of CVC activities by operating companies
Is the “Winter Age” an Opportunity for CVC? 77% answered that CVC operation is doing well. Successful CVC also reveals the reality of “going the opposite of the image”.

Japan’s largest (*) CVC community “FIRST CVC” (Secretariat: Blue Circle LLC), which is engaged in startup investment, is a business company that covers 110 companies from various industries and sizes and a total budget of over 410 billion yen.・Announced “Japan CVC Survey 2022,” one of the largest surveys on the actual state of startup investment by CVC.
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[Survey result summary]
77% of responding companies answered that the status of CVC activities was “good.” 39% intend to continue to increase the number of investments in the future (47% maintain the level, 14% expect to reduce), and while startup investment is said to be in a tough environment overall, CVC investment is expected to expand in the future.
The average fund size of CVC organizations exceeds 3.5 billion yen, a scale comparable to medium-sized VCs. The number of investments in the first half of 2022 is equivalent to about one-fourth of the total in Japan, just for the investment projects of responding companies. 61% of companies answered that they can handle lead investment, 77% of CVCs answered that they can make investments that are not based on synergies, and 46% are organizations that also serve as M&A
organizations, which is different from the general image of CVCs. The reality is clear.
Based on the analysis of the survey results, 20% of the total are defined as particularly excellent CVCs “leading CVCs”. As a result of comparison with general CVC, new facts were confirmed such as “chasing two rabbits” of business synergy and financial return is more successful, emphasizing practical synergy rather than long-term, and actively providing support after investment.
On the other hand, future issues such as a weak sense of finance as an investor, a uniform personnel structure centered on the company, and a lack of internal involvement were also highlighted.
[Survey overview]
Survey implementation period: August to October 2022
Response period: January 2018 to June 2022
Survey method: Internet questionnaire for responding companies Survey target: Business companies and CVC funds that are investing in startups or are considering investing. Includes VCs that mainly manage their own group funds, such as financial VCs.
Research cooperation: DIAMOND SIGNAL Editorial Department
[Implementation purpose]
・As an industry group where CVC parties gather, we will provide member companies with benchmarks and guidelines for future investment activities.
・Provide startup companies with information on the actual situation and latest trends in investment activities of operating companies and CVCs, and provide options for funding and alliances
・Clarify the role of CVC activities in the Japanese startup ecosystem and contribute to the promotion of the Japanese startup industry *In-house research as of December 2022 in the VC/CVC industry. “Japan CVC Survey 2022” Survey Results Summary
■ Most CVC activities are “strong” and investment appetite remains high 11% of respondents said they were doing very well, and 66% said they were doing well. Only 23% said they were unwell. In addition, there are many organizations that have been operating for 0 to 2 years and organizations that have been operating for 6 years or more are doing particularly well.
As for the number of future investments, 39% of the organizations answered that they would increase, while 47% answered that they would not change.
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* Based on the survey results, companies whose investment objectives are closer to financial returns are classified as Financial, companies that are closer to strategic synergies are classified as Strategic, and those in the middle are classified as Hybrid.
■ The number of CVC investments exceeds a quarter of Japan
The average fund size of CVC organizations exceeds 10 billion yen for companies with group sales exceeding 500 billion yen, and 3.5 to 4 billion yen for companies with group sales of less than 500 billion yen. It is comparable in size to
In addition, the number of investments by the surveyed companies in the first half of 2022 is 274, which is about a quarter (*) of all investment projects in Japan. is assumed to be the financing of operating companies and CVC investments.
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* FIRST CVC estimated from INITIAL “Japan Startup Finance 2022 First Half” ■ Contrary to the image of a follow-up center, CVC’s investment policy is at the same level as general VCs
61% of the companies answered that they can handle “lead investment” leading the funding round, and 82% of the companies are hybrid CVCs that aim for both financial returns and strategic synergies. This is a high level even compared to similar CVC surveys (*) globally. In addition, 77% of CVCs answered that it is possible to make investments that are not based on synergies, regardless of the operating purpose.
In addition, 46% of companies have a CVC organization that also serves as an M&A organization, and 64% of them are conducting investment activities with an eye on M&A.
As a result, it can be said that the reality is different from the general image of CVC, such as not being able to make lead investment, not being able to invest without synergy, and not being able to lead to M&A.
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*Silicon Valley Bank “The State of CVC 2021”
■ Excellent CVC “chases two rabbits”
From the perspective of classifying CVCs, based on the results of this survey, CVCs with favorable operating conditions, high internal evaluations, abundant investment records, and maintaining a proactive investment stance in the future are classified as “leading CVCs.” defined and analyzed how it differs from other CVCs.
As a result, 52% of the leading CVCs are hybrid types that aim for both business synergies and financial returns, emphasizing practical synergies, and being fully active in supporting startups. became clear.
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■ Financial perspective, diversity, and internal understanding are future issues Issues peculiar to CVCs include the fact that VCs cannot set general financial targets, and that they have a weak sense of finance because they are not core business investors. It was also found that the personnel composition was based on
In addition, as a sense of on-site issues, it became clear that the CVC department, which tends to be treated as a Dejima organization, tends to be isolated, such as the difficulty of getting the company involved, which is essential for synergy creation.
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The detailed report of this survey can be downloaded from the following URL.
■ Companies that responded to the survey (only companies that have permission to publish their names)
Sony Ventures Inc., SoftBank Corp., Marui Group Inc., Aflac Ventures Japan Inc., Mitsui Fudosan Co., Ltd., Mitsubishi Warehouse Co., Ltd., Mitsubishi Estate Co., Ltd., AIX Tech Ventures Inc., Chatwork Inc., CRG Investment Co., Ltd. , FUJIYAMA BRIDGE LAB, Gakken LEAP, Seino Holdings Co., Ltd., Tatsuta Electric Wire Co., Ltd., Double Sharp Partners Co., Ltd., Toyota Boshoku Co., Ltd., Hamee Co., Ltd., J. Front Retailing Co., Ltd., JAPAN CONTECH FUND, JP Investment Co., Ltd., NOBUNAGA Capital Village, SMBC Venture Capital Co., Ltd., SOLIZE Co., Ltd., TBS Innovation Partners LLC, Alfresa Holdings Co., Ltd., Anchor Ship Partners Co., Ltd., Always Capital Co., Ltd., Oricon Co., Ltd., Canal Ventures, Canon Marketing Japan Co., Ltd. Company, GREE Ventures Co., Ltd., KOKUYO Co., Ltd., Starts Corporation Co., Ltd., Minami Incubate Co., Ltd., FFG Venture Business Partners Co., Ltd., JR West Innovations Co., Ltd., MOL PLUS Co., Ltd., MTG Ventures Co., Ltd., SEKAISHA Co., Ltd. WOWOW, Adways Ventures Inc., Innovation Inc., All About Inc., COLOPL NEXT Inc., Sazabi League Inc., CEC Inc., T-Gaia Inc., Digital Garage Inc., Denso Corporation, Piara Ventures Inc., FamilyMart Co., Ltd., Pola Orbis Holdings Co., Ltd., Mynavi Co., Ltd., Obunsha Ventures Co., Ltd., Kyoshin Social Capital Co., Ltd., Hiroshima Venture Capital Co., Ltd., Isetan Mitsukoshi Innovations Co., Ltd., Sankei Digital Co., Ltd., Haseko Corporation, Hakuhodo DY Ventures Inc., Mt.Fuji Magazine Service Co., Ltd., Kiyo Capital Management Co., Ltd., Capital Co., Ltd., Sumitomo Life Insurance Company, Shochiku Ventures Co., Ltd., Shizuoka Capital Co., Ltd., Sekisui Chemical Co., Ltd., Maeda Corporation , Chubu Electric Power Co., Inc., Toppan Printing Co., Ltd. , Nankai Electric Railway Co., Ltd., Nanto Capital Partners Co., Ltd., NGK Spark Plug Co., Ltd., Takara Holdings Co., Ltd., Ajinomoto Co., Ltd., etc., etc., 110 companies in no particular order, notation according to the
It is Japan’s largest (*) corporate venture capital community where business companies and CVCs working on open innovation and startup investment gather and learn from each other.
More than 250 investment managers and managers from 150 companies gathered to share CVC-specific issues and know-how across the board. We are working on matching with startups.
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