Japan is the fund leader among Asian universities

Japan has one of the most advanced university venture fund ecosystems in Asia, with 85% of its top academic institutions having an investment vehicle to support its spinouts and other startups.

Japan is an outlier among Asian countries for its sophisticated network of university venture funds, however. Less than a quarter of the top universities in Asia have access to a dedicated venture fund, making the world’s most populous continent the one with the fewest university-affiliated investment vehicles.

Earlier Global University Venturing research found that a third of the most research-intensive universities in the US have a fund. At the same time, more than 40% of European institutions and more than half of Australian campuses have funds.

University venture funds offer critical financing to spinouts, which can struggle to receive VC funding at such as early stage. Universities that have a fund tend to have a higher spinout rate than those that don’t.

Out of the 34 funds affiliated with a top Asian university — as listed by the QS World University Rankings — a majority are concentrated in West Asia, specifically Japan.

Nearly all of Japan’s top universities have a fund

A total of 13 Japanese universities appear in the list, out of which 11 have a fund. Because the University of Tokyo has two funds, Japan accounts for nearly a third of all the university-affiliated investment units in Asia. The assets under management range dramatically in size, from the $4.6m Hiroshima University and Hiroshima Prefecture University Venture Support Investment to University of Tokyo Edge Capital Partners (UTEC), which has raised $594m so far.

Apart from UTEC, the University of Tokyo also has the University of Tokyo Innovation Platform (UTokyo IPC), which has $420m under management. This gives the university a combined capital resource of just over $1bn. That’s just inching close to the University of Oxford’s investment fund Oxford Science Enterprise, which has $1.1bn, and is currently the world’s largest university venture fund.

Notably, UTEC also invests internationally. This makes it part of a rare breed of university venture funds that have looked beyond their immediate region. In fact, thus far only Theodorus, set up by Université libre de Bruxelles in Belgium, has also invested on another continent, setting up an office in Montreal, Canada.

One of UTEC’s first international investments was the $46m series A raise for Oxford Quantum Circuits, a quantum computing spinout of the University of Oxford, in 2022. But UTEC also invests closer to home: for example, it backed a $7.2m round for Singapore-based AI-powered vehicle routing technology developer SWAT Mobility earlier this year.

UTEC isn’t short of opportunities in its home country, however: although the local tech transfer association, UNITT, does not appear to have surveyed tech transfer activity since 2018, third-party research suggests there were at least 2,905 spinouts in the country by 2020.

It is worth highlighting, too, that UTEC is one of the oldest, continuously running university venture funds in the world. It was set up in 2004, a decade before the Japanese government began to bolster university spinout investment and allocated cash to four institutions to set up funds: the University of Tokyo (leading to the creation of UTokyo IPC), Osaka University, Kyoto University and Tohoku University. Today, Osaka University Venture Capital has $162m under management, Kyoto University Innovation Capital has $245m and Tohoku University Venture Partners has $122m.

Japanese university funds are prolific investors. According to an analysis by Global University Venturing in 2022, UTEC is the second most active backer of spinouts globally and UTokyo IPC came in at 11th place.

China and South Korea are catching up

Seven South Korean universities have a fund. In addition, South Korea is the home of POSCO Venture Capital, a fund set up by POSCO, a South Korean steel manufacturer, which also set up Pohang University of Science and Technology (also known as POSTECH). The only other fund that straddles the line between a university and a corporate in this way is UM6P Ventures, the investment fund of Mohammed VI Polytechnic University in Morocco that is owned by phosphate rock miner OCP Group.

In China there appear to be six institutions with a dedicated investment vehicle. However, given the difficulty in finding information about Chinese institutions, there are a few caveats. For example, Beihang University’s investment fund, BUAA Holdings, reportedly invested in September 2023 — its first in six years. However, BUAA Holdings’ website appears to be offline and it is unclear if the fund is still active or what structure it employs.

It is similarly unclear whether Tsinghua University’s Tsinghua Technology Transfer Fund is still operational — it appears not to have made an investment since 2021, according to deals database PitchBook, though its website is still active and LinkedIn shows managers listing the fund as their current employer. Global University Venturing’s enquiries to Tsinghua University went unanswered.

Tsinghua University also has a sprawling network of affiliates and subsidiaries via asset management firm Tsinghua Holdings. The firm is state-owned and the complex legal structure makes it difficult to identify any given unit as a university venture fund for the purposes of this analysis.

India has few university funds

India has one of the world’s highest counts of unicorns with a combined value of nearly $350bn, according to Forbes, but the country’s universities do not tend to have funds to invest in their spinouts.

The Indian Institute of Technology, Delhi makes equity and debt investments through its Foundation for Innovation and Technology Transfer, though there doesn’t appear to be a dedicated fund. The Indian Institute of Technology, Bombay, meanwhile, has made investments through SINE IITB IOE Scale up, but it’s unclear if the money has been fully deployed. The other nine universities on the list do not appear to be making equity investments in their spinouts.

Global University Venturing is finalising its report of university venture funds and plans to make available the list of funds to subscribers this autumn. In the meantime, we continue to collect data through our survey — if you missed the first deadline, you can fill in the survey now and be included in an update we plan to release early next year.