The Canadian venture firm is opening an office in Asia as Asian corporations flock to invest in its fifth fund and largest fund.
Pangaea Ventures, the Canadian venture firm focused on hard science startups, is opening its first office in Asia, in Japan, as a slew of Asian corporations join the company’s fifth and largest fund, which closed at $85m last week.
Chris Erickson, general partner of Pangaea Ventures says the firm is expanding in the region in response to a growing number of deep tech startups emerging in Asia.
“We are seeing some interesting hardtech deal flow in Japan, especially related to semiconductors,” he says.
“We want to explore this more and possibly make investments in Japan. We have 13 Japanese corporates, two Korean corporates and one Taiwanese corporate as limited partners (LPs) across our funds. We believe an office in Tokyo allows us to strengthen these relationships.”
Mitsui OSK Lines’ MOLPlus unit, JX Nippon Mining and Metals, chemical producers Mitsubishi Chemical Group, JSR and Toagosei — all Japanese corporations — were among the 11 LPs for Pangaea Ventures Impact Fund. GC Ventures, part of Thailand’s PTT Global Chemical, is also among the investors for the fund.
Founded in 2000, Pangaea Ventures invests in materials science, biology and chemistry-oriented startups, or ‘hardtech’ as Erickson describes it, and has had corporates among its LPs for each fund, a list that includes BASF, Samsung, Sabic, Castrol and Solvay.
Asian corporates have been contributing to Pangaea’s capital since its second fund, which closed in 2008 with backing from Asahi Glass and the American arm of Toyota Tsusho. Erickson says several have now invested across multiple funds. The firm has existing offices in the US and Canada.
Impact Fund has so far backed five startups: carbon capture technology developer Ardent, hydrogen electrolyser company Versogen, microbiome drug developer Kanvas Biosciences, carbon sequestration startup Biodel and pH7 Technologies, which is working on more sustainable mining processes.
None of those are located in Asia, but Erickson believes they are indicative of a tech market where hard technology can deliver returns while also making a difference to some of the world’s biggest issues. And that view extends to its corporate partners.
“Climate, sustainability, health and semiconductors are all hot areas right now and we believe that hardtech innovation is critical for these markets that impact planetary health,” he says.
“We have been working with corporate LPs for nearly 25 years and understand the importance to them of external innovation and working with startup companies. This is a great ecosystem. The corporate LPs get a window on hardtech innovation, the startup companies get great partners, and we benefit as well.”
This article was amended on 30 September to reflect JSR’s position as a limited partner in the fund.
