After the announcement of Warren Buffett’s bet on Japan’s largest trading houses, we take a brief look at how they have been doing on the corporate venturing arena.
The five largest sogo shosha (general trading companies) of Japan now have as a shareholder one of the world´s most famed investors, the oracle of Omaha, Warren Buffett. He has recently turned 90 and his cash-rich insurance and investment conglomerate Berkshire Hathaway has placed a $6bn bet by taking a roughly a 5% stake in each of the five – Itochu, Mitsubishi, Marubeni, Mitsui and Sumitomo.
It is interesting to contemplate whether this sudden interest from the world’s most renown value investor may spark up interest in Japanese startups among venture investors. The sogo shosha have certainly been active corporate venture investors in recent years, as the bar chart from GCV Analytics below illustrates. For a more thorough view, we have included various subsidiaries and spinoffs of the big five that have participated in minority stake deals. Please note that some of the spinoffs have completely legally separated and may carry the respective name for historical reasons only.
In total, the selected corporate investors have backed an estimated 336 deals over the past five years. Barring the SoftBank’s Vision fund and Sony, this actually makes them very significant players in the Japanese corporate venturing scene, accounting for more than 13% of all deals by Japan-based corporates we have reported between 2015 and this year – a total of 2520 rounds. The following chart shows the evolution of deal flow that has received backing from Japan-based corporate venturers.
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