Participation in Japan's First Dedicated Fund Making Majority Investments in Growth-Stage Startups- Contributing up to JPY 5 billion to a JPY 20 billion fund creating a new platform for startup M&A -

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Shingo Ueno) has invested in "Coalis Fund No. 1" (hereinafter "the Coalis Fund"), a vehicle established and managed by Coalis Capital Inc. (Head Office: Shibuya-ku, Tokyo; General Partner: Akinori Harada). This is Japan's first specialist fund to acquire unlisted growth-stage (*1) startups using buyout methods (*2). The Coalis Fund totals JPY 20 billion, of which Sumitomo Corporation will contribute up to JPY 5 billion as a principal limited partner investor (*3).

Background and Purpose

In Japan, compared with Europe and the United States, initial public offerings (IPOs) overwhelmingly dominate as the means for startup founders and investors to liquidate their shareholdings, while M&A-driven exits remain limited. At the same time, most of these IPOs are “small IPOs” with market capitalizations in the range of a few billion to about JPY 10 billion. In 2023, roughly 80% of newly listed companies had valuations under JPY 20 billion, and unlike in the U.S., many relatively small startups go public before they have achieved sufficient growth. As a result of this proliferation of small IPOs, many startups are unable to raise adequate funds at the time of listing, cannot secure the additional investment needed for growth, and find their market valuations stagnating – an issue that has been widely pointed out.
With only about a hundred startups achieving an IPO each year and venture capital funds maturing after 2025 expected to increase, demand for secondary funds (*4) is rising as one outlet for selling fund holdings.
Against this background, Sumitomo Corporation has invested in the Coalis Fund to help invigorate startup M&As by large corporations and to channel more risk capital to growth-stage startups.

About the Coalis Fund

The Coalis Fund targets unlisted growth-stage startups in Japan. It acquires shares from existing shareholders on the secondary market to obtain management control and then works to enhance corporate value.

Fund Size	:	Up to JPY 20 billion
Term	:	8 years (4-year investment period)
LP Investors	:	Sumitomo Corporation, Mizuho Bank, Sompo Growth Partners, Sumitomo Mitsui Trust Bank
Target Companies	:	Unlisted growth-stage startups in Japan
Focus Areas	:	Internet and software-driven businesses such as e-commerce, media, SaaS and subscription services, and “deep tech” fields including AI, biotechnology and cleantech

Sumitomo Corporation's Buyout Fund Initiatives

Sumitomo Corporation has been active in the buyout fund business for over 20 years and currently invests in the Rising Japan Equity and REVA. Sumitomo Corporation has not only provided capital but also engaged in fund operations, seconding personnel and contributing at every stage from sourcing through execution to exit.

Future Initiatives

As a principal LP investor, Sumitomo Corporation will leverage Coalis’s extensive startup network together with its own longstanding expertise in fund investment and value creation to accelerate the growth of portfolio startups. It will also explore collaboration opportunities with the Sumitomo Corporation Group to actively pursue new business development.

1. “Growth stage” refers to when a startup’s business is gaining traction or its profitability is stabilizing
2. A buyout is an investment approach in which investors acquire a company using pooled funds, enhance its value and then realize returns through the sale of shares
3. Limited Partners (LPs) are investors whose liability is limited to their committed capital
4. A secondary fund invests in shares of portfolio companies held by primary funds approaching the end of their term but yet to exit

About Coalis Capital Inc.

Name	:	Coalis Capital Inc.
Location	:	Shibuya-ku, Tokyo
Established	:	February 2025
General Partner	:	Akinori Harada
Business	:	Fund management and administration

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