World Innovation Lab (WiL), a Palo Alto- and Tokyo- headquartered venture capital firm, said Tuesday it has raised over $1 billion.
It’s an enormous fund for the outfit, relatively speaking. The latest funding, which will be deployed across WiL’s multiple funds, including WiL Venture III, WiL strategic partners funds, and its corporate VC funds, brings the firm’s total assets under management to over $1.9 billion.
Co-founder and CEO of WiL, Gen Isayama, previously worked at DCM Ventures in Silicon Valley for about a decade before co-founding WiL in 2014, told TechCrunch in an interview. It was there that he saw the boom of Asian technology in early 2000, starting in China (and now in India and Southeast Asia). He was fascinated with how tech innovation ecosystems emerge, all of a sudden, from different countries.
When he launched the WiL’s debut fund in 2014, Isayama told TechCrunch, the agenda that Japanese corporations tended to discuss centered on how to digitize the way they work and how to make better use of software technology. Adding that a lot of government officials and big corporations used spreadsheets or paper and pen to do their work eight years ago.
They knew they had fallen behind innovation happening elsewhere in the world. The WiL CEO saw Japan lose its technology competitiveness after 2000 as the internet emerged because the country’s entire industries heavily depended on hardware — which is still essential — and it focused too little on software, Isayama explained.
WiL wanted to address large corporates’ pain points by bridging Japanese corporations and the venture world and leveraging the corporations’ talents and resources like money, technology, and networks. Indeed, WiL’s limited partners were, and remain, mostly Japanese corporations, said Isayama and they function very symbiotically, he suggested.
For example, WiL, which today has 22 employees in Palo Alto and 20 in Tokyo, makes available to its investors, too. WiL invites them to use the space because these strategic limited partners are “technology experts and advisors in each sector like automotive, airline and consumer electronics, … They love to be involved, helping WiL members to be successful.”
Isayama noted that “typical VCs would hire these experts, but we don’t need to do that. That’s how I structure this venture capital firm to be very differentiated [from others].”
As important, WiL’s LPs become eventual users of WiL’s portfolio companies, Isayama continued, saying it’s like a win-win-win situation where WiL, LPs, and its portfolio companies all benefit.
Today, most of WiL’s portfolio has been focused on the U.S. and Japan, but WiL is open to backing great entrepreneurs wherever they are based and is increasingly looking at other markets such as LATAM and Europe, Isaysma said, adding that the firm does not expect to shift its geographical focus significantly.
As for stage of investment, WiL will continue to focus on the growth and late-stage market in the U.S., with Japan remaining multistage oriented. The outfit is particularly interested in cloud infrastructure, fintech, healthcare and cybersecurity, though, with its newest fund, WiL also plans to focus more heavily on how to make the world sustainable. Toward that end, it intends to prioritize startups that are focused on sustainability, energy tech, water technology, envirotech and climate tech. (Those pain points that the firm sees arising not just in its limited partners’ base, but in society as a whole, said Isayama.)
WiL has seen a number of its portfolio companies go public from its first and second funds, including Asana, Mercari, Raksul, Wise. Another portfolio company, Auth0, was acquired by Okta. In the meantime, WiL says it has a total of 15 unicorns in its portfolio currently, including Aiven, Algolia, Automation Anywhere, DataRobot, Kong, Sendbird, SmartHR, Rippling, UnQork and Wise.
WiL now manages seven funds altogether — three main funds for direct investment (WiL Venture I, Venture II and Venture III), two WiL strategic partners funds (fund of funds) and two corporate venture capital funds (Tokio Marine Fund and Fujiyama Bridge Lab Fund).
Isayama did not disclose the individual breakdown by the fund, but said investors in the newest fund include Brother Global, Panasonic, Japan Investment Corporation and Subaru. WiL launched its $360 million first fund, or WiL Venture I, in January 2014 and $521 million WiL Venture II in June 2017.
WiL’s previous limited partners include Sony, Square Enix, Jvckenwood, Panasonic, NTT Docomo Ventures, KDDI, Osaka Gas, ANA Airline, Suzuki Motor, Nissan Motor, Suzuyo, 7&i Holdings, Isetan Mitsukoshi, Mori Building, KAJIMA, ITOCHU and Japan Investment Corporation.