As part of the so-called “industrial revolution in the air”, the market for commercial drones has been expanding rapidly. Drone Fund sees this as a sign of emerging “drone technology-enabled society”. According to reports, the drone market in Japan is expected to grow to JPY 253-billion (USD 2.26bn) market by 2024, whereas the global market size for drone technologies is expected to reach JPY 18 trillion (USD 160.8bn) by 2022.
Additionally, Drone Fund believes in air mobility solutions and that flying cars will be utilized for mitigation of traffic over congested urban areas, disaster response, and promotion of tourism. As part of a roadmap towards an “air mobility-enabled society” endorsed by Japan Cabinet, air mobility technology solutions gained more attention in recent years.
The Drone Fund 2 (formally known as “Chiba Dojo Drone Sect. 2 Investment Project Limited Partnership”; abbreviated to Drone Fund 2) is a new fund with investment focus on Japanese as well as international drone technology or air mobility related startups that can demonstrate superior technical capabilities and unique ideas in their seed and early stages. Additional to venture capital, Drone Fund will also provide its portfolio companies with robust support from an expert team led by Drone Fund’s founder Mr. Kotaro Chiba, who has extensive knowledge and experience with drone technology ventures as well as management in the Internet Technology space.
Anchor investors of the second fund include Mr. Keisuke Honda (a member of Japan national football team) as well as other angel investors and Japanese major enterprises such as Mizuho Bank, Ltd., KDDI Corporation and SEGA SAMMY HOLDINGS INC., all of whom are willing to strongly support Drone Fund 2 portfolio companies.
Drone Fund 2 will not only arrange all-round collaboration among its portfolio companies in both hardware and software, but also promote co-operation with major enterprises in an effort to help nurture “world-class drone technology and air mobility” companies from Japan. The first close and final close are set for the end of September and the end of December 2018 respectively and the fund aims to raise funds of up to 5 billion JPY (USD 45m).
Goal of Drone Fund: “Helping to Nurture Visionary Ideas for Drone Technology-Enabled Society”
Drone Fund will invest in domestic and international startups in commercial & consumer drone technology or air mobility industries, whose business is in line with fund’s vision of “helping to nurture a drone technology- enabled and air-mobility enabled society.” Realizing synergies between portfolio companies and connecting them together under one “Japan Drone Team”, Drone Fund aims to help portfolio companies gain share both in Japanese domestic as well as international markets.
Results of Fund 1
Drone Fund 1, Japan’s first fund specialized in drone technology startups attracted significant response supported by growing public interest in drone technologies. Drone Fund 1 raised a total of 1.6 billion JPY (USD 14.3m) in January 2018 and has made investments in 21 drone-related startups as of the end of July 2018.
Investment portfolio is diverse and includes both international and domestic and both software and hardware companies. For example, CLUE, Inc., a provider of drone survey and measurement services is a first Japanese drone industry company that concluded a cooperation agreement with the Government of Ghana for a road inspection project using drones.
Mr. Keisuke Honda and domestic enterprises as anchor investors
Many Japanese domestic businesses have shown interest in Drone Fund’s concept and invested in Drone Fund 2. The founding investors in Drone Fund 2 – Mizuho Bank, Ltd. and KDDI Corporation – both well-known Japanese corporations have declared to join the fund as anchor investors in order to expand the Drone Fund further.
Also, Mr. Keisuke Honda, an Angel Investor and world-famous athlete took interest in Drone Fund’s vision and declared his intention participate in Drone Fund 2 with KSK Angel Fund.
■ New investors: Mizuho Bank, Ltd., KDDI Corporation, Mr. Keisuke Honda, and Mr. & Ms. Takashi, Reiko & Takehiko Mabuchi
■ Continuing investors from Fund 1: Mistletoe, Inc., Canal Ventures, Ltd. (formerly Nihon Unisys, Ltd.), Japan Asia Group Limited, K.K. FFG Venture Business Partners (Fukuoka Financial Group), Aucfan Co., Ltd., and Leave a Nest Co., Ltd.
Angel investor Kotaro Chiba assumes a central role as the General Partner & Chief Dronist
Kotaro Chiba is the Founder of Drone Fund. He is a drone specialist who has been granted a nationwide blanket flight permit by the Japanese Ministry of Land, Infrastructure and Transport in consideration of his drone flight experience with over 300 flight hours under his belt and possession of over 50 drones. A renowned angel investor, he is also a qualified institutional investor, with track record of investing in about 70 domestic and international startups and funds. He previously worked as the Vice President of a company COLOPL, Inc. (TSE 3668) and has various other experiences both as an entrepreneur and corporate executive. He will use his considerable experience to support portfolio companies in Drone Fund 2.
Experts in fields such as drones, robots, and Internet businesses gather together as Drone Fund’s advisory board
■ “Drone Fund Ecosystem” provides support to Drone Fund’s portfolio startups
One of the key benefits for portfolio companies is that Drone Fund provides startups not only with financial investment, but also support with IP and manufacturing. “Drone Fund Ecosystem” network enables portfolio companies to create joint development proposals for opportunities on Japanese domestic market.
Founded in 2017, Drone IP Lab Inc. is a company under Drone Fund’s direct control, dedicated to pursuing joint patent applications for drone-related ventures. The company owns various patents (IP) related to drones. Drone IP Lab jointly reviews patentability of inventions, which would normally be a cumbersome process for individual startups, and where relevant files a joint application at the expense of Drone IP Lab. These patents are to be shared and utilized among Drone Fund’s portfolio companies as part of the Drone IP Lab Innovation Scheme.