The University of Tokyo will launch one of Japan’s largest university-tied investment funds by the end of the year, pouring up to 16 billion yen ($157 million) into affiliated startups in pharmaceuticals, materials and other fields with long timelines that tend to deter private investors.
Pending approval from the education ministry, the university will put 23 billion yen into an investment fund launched by subsidiary UTokyo Innovation Platform. It will also seek investments into the fund by private-sector companies.
Some 60-70% of the total will go to 40 to 50 businesses with roots at the school in drug and materials development. The remainder will be provided to another venture capital firm that invests in University of Tokyo-affiliated startups in such fields as artificial intelligence and robotics.
A second fund will be launched in two to three years, investing in efforts to commercialize joint research between the school and major corporations. The university placed the former CEO of Mitsui & Co. Global Investment at the helm of UTokyo Innovation Platform in hopes of discovering promising businesses.
Venture capital firms tend to shy away from university-affiliated startups, which are said to take more time than internet-based ones to start making money. The Japanese government began allowing public universities to create investment companies in 2014. It gave a total of 100 billion yen to four major institutions, including 41.7 billion yen to the University of Tokyo.
The other three — Kyoto University, Osaka University and Tohoku University — have already launched their own funds of about 10 billion yen to 16 billion yen to invest in medical and chemical startups and other businesses. Many observers were eagerly awaiting moves by the University of Tokyo, which had received the biggest pie out of the four.