SBI launches $600 million fund to invest in Web3 and AI

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Following the successes of its previous technology-driven funds, Japanese-based Web3 firm SBI has announced a new fund to invest in Web3 and artificial intelligence (AI) startups.

Called the SBI Digital Space Fund, the JPY 100 billion ($660 million) fund will pay keen attention to companies dabbling in emerging technologies and is considered the successor to the SBI 4+5 fund. According to SBI Investment, the venture capital (VC) arm of SBI Holdings, the new fund is expected to inject capital into firms in the early stages of their development.

Apart from prioritizing AI and Web3 startups, SBI’s new fund will be interested in investing in firms building innovative solutions in fintech, climate technologies, digital transformation, and healthcare verticals.

“Through the broad network of startup companies in which the Fund will invest, SBI Investment will more proactively promote activities towards solving social issues such as promoting DX and open innovation,” read a company statement. “By supporting the enhancement of services provided by invested companies and investors, SBI aims to contribute to the growth and development of new industries.”

SBI Investment says the fund will increase the market values of selected startups, increase their profitability, and play a leading role in triggering sustainable growth in the startup ecosystem. Sources in the know suggest that the fund may prioritize Japanese-based startups, but given the track record of SBI’s previous funds, a global outlook to funding is expected.

The statement notes that SBI is currently shopping for institutional investors for the fund, adding that the process has been “progressing smoothly.” Several investors, including Mizuho Bank (NASDAQ: MFG), the Bank of Fukuoka (NASDAQ: FKKFF), Nippon Life Insurance Company, Sanyo Foods, and Mandam, have pledged support for the fund.

In the future, SBI will continue to actively work on nurturing next-generation industries and increasing the corporate value of venture companies in which they invest,” read the report.

However, SBI Investments still needs to issue a potential launch date for the fund, with pundits predicting a date in the first quarter of 2024. The latest move follows a collaboration between SBI Holdings and SC Ventures to roll out a Digital Asset Joint Venture in Abu Dhabi starting in November.

Deep ties in Web3

SBI is no stranger to Web3 given its extensive investments in the space, famously investing in B3i and SBI Traceability. The company has previously floated its digital currency exchange after acquiring digital currency trading firm B2C2 in 2020.

SBI has dipped its feet into tokenized securities outside digital currencies via investments in BOOSTRY and MUFG’s Progmat platform. SBI’s holdings in leading blockchain technology firms like Ripple (NASDAQ: XRP) and R3 have deepened the company’s ties with the Web3 ecosystem outside Japan.

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Watch: How Web3 is reshaping the internet at the GITEX Global Dubai 2023