Supporting Startups Beyond "Regional Bank VC": Challenging the Transformation That Expands the Scope of Banking

Miroto Ohara

FFG Venture Business Partners

Born in 1988. Joined Fukuoka Bank, Inc. in 2010, working in corporate loan operations. Since 2018, has been involved in investment and support for startups from early to later stages at FFG Venture Business Partners, focusing on a wide range of startups in fields like FinTech, e-commerce, space, IoT, and DeepTech. As a capitalist, he handles a diverse array of startups spanning from finance to cutting-edge technology sectors.

Key companies he is responsible for (10 companies)
・Indygohttp://indygo.co.jp・Oh My Glasseshttps://www.ohmyglasses.co.jp・Money Designhttps://www.money-design.com・QPS Laboratoryhttps://i-qps.net・Kyuluxhttps://www.kyulux.com/?lang=ja・Curationshttps://curations.jp・KOALA Techhttps://koalatech.co.jp/JP/・Moneytreehttps://getmoneytree.com/jp/home・Paytner (formerly Yup)https://paytner.co.jp・Monstar Lab Holdingshttps://monstar-lab.com/jp/

‍

‍

Startup Support Beyond "Regional Bank VC"

‍

- FFG Venture Business Partners (FVP) is a VC/CVC under Fukuoka Financial Group (FFG), the largest regional bank in Kyushu. Could you tell us about its positioning within the group?

‍

Fukuoka Financial Group (FFG) is one of the largest regional financial groups in Japan, with a primary focus on the Kyushu region. Under the group, there are Fukuoka Bank (Fukuoka), Kumamoto Bank (Kumamoto), Shinnwa Bank (Nagasaki), and Minna no Bank (a digital bank), with FVP being part of the group.

‍

‍

We aim to contribute to the creation of startup ecosystems by leveraging advanced technologies and generating new industries, beyond just the scope of being a "regional bank VC." We are not limited to the "Kyushu region" or "financial sector," and have invested in a wide range of startups both domestically and internationally.

‍

- Could you tell us about FVP's organization and the composition of its fund size?

‍

FVP operates the following four types of startup funds:

1. "VC Fund 10 billion yen" → A fund focused on pure investment
2. "CVC Fund 5 billion yen" → A fund aimed at business co-creation with FFG
3. "FoF Fund 5 billion yen" → A fund designed for LP investments in other venture capital funds
4. "Kyushu Open Innovation Fund 1 billion yen" → A seed-phase focused fund (joint GP with GxPartners)

Currently, our company has 28 members, of which 12 are capitalists.

The total fund size is over 21 billion yen, with investments in more than 70 companies, making it the largest fund in terms of both size and the number of investments among regional bank VCs.

‍

‍

- Could you tell us about your investment policy and exit strategy?

‍

The main investment stage ranges from early to later stages (Series A and beyond).

We target both domestic and international investments. In our portfolio by region, 60% is in Tokyo, 30% in Kyushu, and 10% in other areas.

The ticket size ranges from 30 million yen to 100 million yen, and we actively support follow-on investments as well. While follow-up investments have been more common so far, we plan to aim for leading investments going forward.

The fund duration is 10 to 15 years, and we expect exits through traditional methods such as IPO or M&A. To accelerate activities beyond the scope of a regional bank VC, we plan to expand new funds and support offerings in the future.

‍

- The full-line startup investment system certainly reflects the commitment to "go beyond the scope of regional bank VC." Which funds are you responsible for, Mr. Ohara?

‍

Initially, I was part of the pure investment fund team, but since 2020, I have been responsible for the newly established CVC fund.

The pure investment fund focuses on financial returns and covers a wide range of sectors from IT to DeepTech. The CVC fund, in addition to financial returns, includes investments aimed at generating synergies with FFG for strategic returns.

‍

‍

Supporting Local Businesses Through the Power of Finance

‍

- Could you share some background on your life before joining FEG? What was your childhood or student life like?

‍

I was born, raised, and started my career in Fukuoka, and I’ve always loved sports. I started boxing in elementary school and participated in amateur competitions. During middle and high school, I was on the baseball team and learned the joy of teamwork. In college, I traveled to 20 countries, mostly in Asia, as a backpacker.

- It’s hard to imagine an elementary school student practicing boxing. What inspired you to start?

I’ve always hated losing. Around third grade, I played with toy boxing gloves with my friends and got completely beaten, which left me feeling frustrated (laughs). I begged my parents to let me take up boxing, and that’s how I started training at a boxing gym where professional fighters trained. At that time, there weren’t many people my age training there.

In middle and high school, I devoted myself to baseball practice. The SoftBank Hawks’ second-team stadium was just a bike ride away from my house, so I often went to cheer them on. I even got a bat from Munenori Kawasaki when he was still in the minor league. However, I didn’t realize its value and ended up breaking it while using it for practice… (sweat)

‍

‍

- You broke the bat from Munenori Kawasaki! That’s quite something! As you went through baseball, boxing, and backpacking during your student years, what kind of vision or thoughts did you have about your future career?

‍

Since I was a student, I had an interest in business management, and I actively took courses where entrepreneurs and business leaders gave lectures at university. I also often attended startup events, which sparked my interest in working with startups.

When I started job hunting, it was around the time of the global financial crisis, and the economy was rapidly cooling down. Many companies canceled their new graduate recruitment, so I applied to about 70–80 companies across various industries. Among them, I became interested in the banking industry, as I thought I could support business management and work alongside company presidents.

‍

- The global financial crisis had just occurred, and you chose the banking industry as your career path. What was your reasoning behind this decision?

‍

Because of the financial crisis and the economic downturn, I chose banking. The effects of the Lehman Shock were felt in the Kyushu economy as well, and every day the newspapers were filled with stories of companies going bankrupt or struggling with poor performance. I felt that by working in banking, I might be able to help support these businesses during tough times and gain knowledge to help support their management. I decided to join Fukuoka Bank because it would allow me to contribute to the economy of my hometown and the Kyushu region.

‍

- Could you tell us about your work and experiences from joining Fukuoka Bank in 2010 until you moved to FVP in 2018?

‍

After joining the bank, I gained experience in a variety of banking operations, including deposit services, asset management, and housing loans. Later, I focused mainly on corporate lending. My clients were primarily local businesses, and I handled a wide range of industries, from manufacturing and construction to services and healthcare. Since I was working with business owners, I learned a lot by listening to their perspectives on challenges and strategies.

In my role, there were two main missions: handling existing clients and acquiring new ones. Personally, I enjoyed new client acquisition the most. While it’s probably not recommended today, back then, I would often visit businesses without appointments to introduce new deals, helping them become fans of our bank’s services. I found this challenging yet rewarding and gave it my all.

While providing valuable business support to companies that were not our primary clients, I prioritized building trust-based relationships with them.

When business owners or employees thanked me and decided to switch their main bank to ours, I felt that I had created new value for our clients, and it was a highly satisfying experience.

In 2016, when FFG Venture Business Partners (FVP) was established, I was eager to join because I had been interested in startups since my university days. When the opportunity came to join FVP, I didn’t hesitate to raise my hand.

‍

‍

- Changing the main bank is a significant decision for a company. How did you approach new clients?

‍

Indeed, it is a high hurdle and takes time.

Especially when changing the main bank, the decision is usually made by the management team, and it was important to build trust with them. To do this, I would often propose refinancing solutions, such as adjusting the balance between short-term and long-term loans based on the company’s financial situation and investment plans. Additionally, I would support business succession or asset management, sometimes including the business owner’s family. I focused on being genuinely involved, working closely with the management, and guiding them toward the best decision. For me, this was a valuable learning experience, and I am grateful to the companies I worked with during that time.

‍

‍

From "Lending Based on the Past" to "Investing for the Future"

‍

- After transitioning from banking loans to startup investments at FVP, what kind of changes did you experience?

‍

To be honest, I was a bit confused at first. When a bank considers lending, it looks at the company's "past" performance. Financial records, past business history, and security measures are all key factors in the credit evaluation process.

On the other hand, in the venture capital (VC) industry, decisions are based on the startup's management team and future growth potential, which is a big difference. While we carefully evaluate business plans from startups, those are just plans, and making decisions in the same way as with loans doesn't work in the VC world.

In venture capital, the ability to discern is crucial. There’s a certain excitement in working alongside passionate entrepreneurs while identifying trends and the future direction of technologies.

‍

- How did you adjust to the differences between focusing on lending and focusing on investment? What steps did you take to adapt?

‍

Since I was able to work in a field I had long been interested in, I was determined to adjust. I started by reaching out to entrepreneurs and capitalists in the venture capital industry and meeting with them as much as possible.

At first, I had no knowledge or network, so I attended every pitch event and webinar I could (laughs).

In early 2019, when the pandemic started, pitch events moved online, which gave me the opportunity to attend startup-related events across Japan. This shift turned out to be a positive factor in helping me catch up with the industry.

As I interacted with people in the startup community, I began to see which startups were growing steadily and which ones were struggling. I started to understand how other capitalists were watching these trends, and I gradually gained insight into the startup ecosystem.

‍

‍

- Could you tell us about the work you do as a capitalist?

‍

The main missions are the following four:

1. 　Sourcing new investment opportunities
2. Supporting portfolio companies
3. Collaborating with banks and group companies
4. Planning events

In "1. Sourcing new investment opportunities," the main sources are introductions from venture capital firms with networks or pitch events. When it comes to introductions, the information is often fresher and the chance of meeting passionate startup founders is higher when based on personal trust between capitalists, rather than just company-to-company relationships.

To maintain good relationships with capitalists I interact with, I ensure we provide valuable information and hold regular meetings. Through casual communication, we often share and align our investment philosophies and values.

In this regard, I am very grateful to have been able to expand my circle of contacts by participating in the FirstCVC initiative hosted by Blue Circle, which has been a great help in building relationships!

In "2. Supporting portfolio companies," I am responsible for ten companies as mentioned in my background. Depending on the stage of the startup and the size of our investment stake, I participate in various meetings, such as management meetings, board meetings, and shareholder meetings. By understanding the company’s situation, I think about how I can contribute as a capitalist or how FFG can add value.

‍

- Could you tell us the key factors you focus on when making investment decisions?

‍

When making investment decisions, I take a comprehensive approach, evaluating factors such as the management team, market potential, product, growth strategy, competitive advantages, and the potential for collaboration with FFG.

Since my team is a Corporate Venture Capital (CVC) team, when making investments, we always keep an eye on not just financial returns, but also the strategic business co-creation opportunities with FFG as part of the decision-making process.

However, the synergy with FFG is not limited to just the Fintech space. We look for startups that could contribute to the advancement of FFG’s areas such as lending, payments, deposits, leasing, and remittances, as well as those with potential for new business creation in emerging sectors. In the future, we are also focusing on startups in the Web 3.0 space.

Startups are running at full speed to grow rapidly with limited resources. Forcing short-term collaboration may hinder their growth.

While creating synergies with FFG is an important factor, we do not intend to pressure startups into dedicating excessive resources or forcing strategic changes to achieve that. The role of liaising with FFG will be handled by us, the FVP team.

To make sure startups choose FFG, I believe it is essential to build trust with them over the medium to long term. We aim to create synergies after that trust is established, and we always prioritize the "startup first" approach within our group.

‍

‍

- What unique support does FVP provide to startups?

‍

Leveraging the strengths of being a financial institution in Kyushu, we hold matching events called "X-Tech Matchup," which connect startups with potential partner companies. If the startup is one of our portfolio companies, they can participate preferentially. So far, about 200 startups and around 1,400 partner companies have participated, resulting in over 1,100 business meetings.

‍

‍

From our portfolio companies, we receive a wide range of requests, such as collaboration with FFG, introductions to partner companies, and debt financing. In response, FFG accelerates open innovation with startups. When these requests arise, the assigned capitalist or specialized teams handle the necessary requests and coordination with the bank to make them happen.

In the future, we aim to build a hands-on support system across the entire FFG Group, providing support in areas such as growth assistance, strategic planning, fundraising, IPO/M&A support, and human resource development.

‍

‍

Creating Innovation Through Partnerships with Startups

‍

- What do you find rewarding and challenging about working at FVP?

‍

I find it rewarding to be able to work with members who have high aspirations. The collaboration between FFG and startups that CVC aims for is still rare, but I am fully committed to contributing to the creation of innovative services through that collaboration.

To achieve this, it's important to handle the gap between "looking at the past," which is the traditional lending business, and "looking at the future," which is the perspective of startup investments. Moving forward, how we handle this gap, both as individuals and as an organization, will be crucial for our continued collaboration with startups.

Our group has long-standing relationships with established companies, but we’ve had fewer connections with newly founded startups. I think it is important to respect entrepreneurs who are willing to take risks and aim for social change before we even get to the stage of co-creating businesses. While this might seem like a small matter, maintaining this attitude and avoiding misunderstandings will, I believe, increase the possibilities for business co-creation with FFG.

That said, even in the three years I’ve been at FVP, I have seen noticeable changes. The achievements we’ve made—such as co-branded products and collaborative projects with startups—are gradually building up and driving these changes forward.

‍

‍

In order to promote open innovation within our group, top-down efforts are necessary. Fortunately, the leadership at both our company and FFG deeply understands the activities of CVC. We believe that in order to accelerate open innovation through collaborations with startups, it is essential to align ourselves with the direction (and the world) that startups are aiming for, rather than focusing solely on our own new business or self-developed projects.

‍

- Lastly, could you tell us what challenges you would like to pursue in the future?

‍

I would love to grow alongside startups by co-creating innovative businesses through collaboration with FFG. Since FFG lacks expertise in cutting-edge fields, I would be happy to leverage the credit and resources that have been cultivated at the bank over many years to help create new value with startups.

To do that, I want to meet entrepreneurs with high aspirations and vision. As a leader who creates new things, I want to collaborate with people who are sincere, persistent, and have the ability to involve their teams and surroundings, to create new industries together. This is the challenge I would like to pursue.

I honestly feel that I still have room to grow as a capitalist so that I can contribute to the growth of the startups in our portfolio. Through the challenges I am undertaking at FVP, I hope to become a person who can utilize the insights gained to help shift the culture at FFG towards a more future-oriented, risk-taking, and challenge-driven mindset.

As for collaboration between CVCs, after participating in First CVC, I hope to build stronger relationships with other CVCs, deepening cooperation on joint investments, introducing portfolio companies, and exchanging information. Our company also has funds that specialize in LP investments, and I believe this could create opportunities for us to form cooperative relationships in this area as well. I look forward to continuing to work together!

‍