Impact Investing in Wellness and Healthcare Sectors by SIIFIC Wellness Fund
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Article URL: https://bio.nikkeibp.co.jp/atcl/news/p1/24/08/19/12262/
Original Japanese article copyright : Nikkei Business Publications, Inc.
Translation : SIIFIC
A new fund has been launched, focusing on impact investing in the healthcare and wellness sectors. The “SIIFIC Wellness Fund” was established in June 2023 with the support of the Japan Social Innovation and Investment Foundation (SIIF), a specialized organization for impact evaluation, by Kazu Umeda, former President and CEO of m3i, and Reiri Miura, who held roles such as Director of Corporate Planning at Taiho Pharmaceutical.
Impact investing is an investment method aimed at realizing social and environmental impact while securing financial returns. This approach involves identifying and committing to expected social and environmental impacts through impact analysis and investing in companies that drive technological innovation. With the increasing importance of addressing social and environmental issues such as decarbonization and aging populations, there is growing interest in this investment method as a means to support companies working on technological development and business innovation that contribute to solving these issues.
In Japan, the Financial Services Agency published the “Basic Guidelines on Impact Investing (Impact Finance)” in March 2024. The “Basic Policy on Economic and Fiscal Management and Reform 2024 (Honebuto Policy 2024),” approved by the Cabinet in June 2024, included language to “strengthen support for social entrepreneurs (impact startups)” based on the aforementioned guidelines.
In September 2022, Kazu and the SIIF, which aims to promote impact investing and build an ecosystem in Japan, established the venture capital firm SIIF Impact Capital, Inc. (SIIFIC), with Kazu and Reiri serving as co-representatives. Kazu, as Representative Partner and Chairman of the Investment Committee, oversees investments, while Reiri, as Representative Partner and Chairman of the Board, handles governance, operating the SIIFIC Wellness Fund in this structure.
Kazu and Reiri first met in Silicon Valley in 2007 when they were both stationed there for their respective companies, and they reconnected later. Kazu believed that startups, often overlooked due to market conditions, should be evaluated for their impact, while Reiri thought that startups aiming to become unicorns needed an equity story that included both economic and social value understandable to international investors. This shared vision led them to establish the SIIFIC and the SIIFIC Wellness Fund.
The SIIFIC Wellness Fund has received investments from organizations such as the SME Support Japan, Japan Post Insurance, Teikoku Seiyaku Co., Ltd., Keio University, SIIF, Tokio Marine & Nichido Fire Insurance Co., Ltd., and Singapore’s KANETO CAPITAL MANAGEMENT PTE Ltd. As of the end of March 2024, the fund had raised approximately 3.2 billion yen and is aiming for a total of 5 to 6 billion yen within 2024.
The fund’s investment targets are startups in the wellness and healthcare sectors, including those involved in drug development, medical devices, food, and services, from the seed to early or later stages. “We want to demonstrate that even a small fund can take investments to exit by investing in later stages while generating returns from early-stage investments,” said Reiri, Representative Partner. Considering the capacity for hands-on support, they expect to invest in about 10 to 15 companies.
The SIIFIC Wellness Fund made its first investment in J Pharma (Yokohama, President and CEO Masahiro Yoshitake) in October 2023, followed by an investment in OrthoRebirth (Yokohama, President and CEO Yasutoshi Nishikawa) in March 2024. “The fund has seen over 400 deals flow since its formation, and we are currently continuing due diligence on a dozen or so cases,” said Reiri, Representative Partner.
Copyright Nikkei Business Publications, Inc.
