Powerlist Q&A – Gen Tsuchikawa, Sony Innovation Fund

Hiroki Totoki, representative corporate executive officer, senior executive vice-president and chief financial officer of Sony Corporation, said of Gen Tsuchikawa, chief executive and chief investment officer of Sony Innovation Fund (SIF) and Innovation Growth Ventures (IGV): “Over the last 15 years, Gen has embodied Sony’s ongoing commitment to innovation, an attribute which runs throughout our company’s DNA. He has driven a wide range of strategic initiatives, spanning the spectrum of Sony’s diverse businesses worldwide.

“Under Gen’s leadership, SIF has grown from its founding in 2016 into an established venture firm while promoting open innovation throughout Sony. Now with over 60 investments, Gen and his global team provide tremendous value to entrepreneurs across the globe and have expanded our vision and reach by spearheading the newly launched IGV, in partnership with Daiwa Capital Holdings.

“From corporate venture activities and IGV to countless business development initiatives, Gen and the SIF team are incubating the next generation of technologies and startups while bringing Sony closer to the world’s creators.”

1. Any highlights from the past year?

• Within the last year, SIF has made approximately 35 investments, bringing the total number of investments to over 60 since starting in 2016.
• Established IGV in June 2019, in partnership with Daiwa Capital Holdings, to expand our commitment to investing in key high-growth industries in mid-to-late stage startups.
• Expanded investments into new countries and regions such as India and Canada as well as continued expansion throughout Western Europe such as Sweden and Italy.
• Sony Corporation acquired Cogitai – a prior Sony Corp investment – to fuel Sony’s endeavours in artificial intelligence (AI).
• Maintained active engagements with about 50% of our portfolio companies. This includes collaboration through IP co-creation and strategy, R&D, using their services, going to market together and selling their products.

2. What are the plans for the year ahead?

We are continuing to look for innovative companies focused on our areas of interest. Our primary goal for both the SIF and IGV funds is to support the growth of startup companies through our investments and promote open innovation through collaborations between portfolio companies, third parties and renowned research institutions to further the advancement of technology and society as a whole. SIF is now globally managing and operating $285m under management across two venture funds with stage-agnostic capabilities from seed-stage to late-stage.

3. Could you mention some milestones achieved at your unit so far?

Within the last year, SIF in partnership with Daiwa Capital Holdings, launched IGV as a new investment vehicle.  The new Fund (around $150m) includes investment from outside LPs such as Sumitomo Mitsui Banking Corporation and Osaka Shoko Shinkin Bank, as well as entities such as Mitsubishi UFJ Lease & Finance Company Limited and educational institutions.

IGV represents a distinctive form of venture, where we can fully leverage the expertise, capabilities and highly renowned technological resources of Sony through SIF, as well as Daiwa’s wealth of investment and asset management expertise. While SIF primarily invests in seed or early-stage startups, IGV has enabled us to broaden our investments to middle and late-stage startups.

This past year also marked our first investments in new countries such as Canada and India and, with the two Funds, our team will continue to invest in the areas where the world, and Sony, are moving. These include AI, robotics, mobility, IoT, entertainment, medical, fintech, sports and much more.

4. Please mention some pain points and opportunities you’ve encountered in corporate venturing.

As GCV’s recent 2019 survey highlighted, corporate venture capital (CVC) is a fast-growing industry, but it’s still a young sector in the broader world of investment, especially in these uncertain times.

There’s quite a lot of room for growth in everything from fund size and deal size to reputation and the role CVC’s take in investments. There’s still education to be done about how CVCs are positioned in the landscape, for example correcting the idea that most CVC investments lead to an acquisition and so forth. As CVCs continue to mature, we also believe there’s more of an opportunity to take the lead on investments, which has historically not been the case.

Overall, we believe that corporate venture has proven its value to both corporations and the entrepreneur community in the last decade and look forward to seeing how the industry continues to evolve.

5. What do you think all CVCs could do better to make it a stronger industry? 

We believe collaboration is essential – whether it’s with outside co-investors, internal business units or with entrepreneurs. We encourage the entire CVC community to think about how we can further collaboration efforts in both new and existing ways all in the spirit of innovation.

6. For colour, what did you do prior to CVC? 

Gen has spent 15 years at Sony, and prior to taking this position headed corporate development and mergers and acquisitions, business development and investor relations at Sony headquarters. Before coming to Sony, he spent 20 years in the finance industry in companies such as Merrill Lynch. He holds a bachelor of arts from Hitotsubashi Univ in Japan and an MBA from Stanford Graduate School of Business.