Fujitsu Ventures has raised a new $104m fund to invest in AI and quantum computing — as well as even more cutting-edge emerging technologies.
Fujitsu’s new $104m investment fund will allow the Japanese technology company to expand into investments in “less-charted territories” both in terms of sector and geography, Hideaki Yajima (pictured), president and CEO of Fujitsu Ventures informed Global Corporate Venturing.
The Fujitsu Ventures investment arm, set up in 2021, has so far focutilized mainly on investing in startups in the US, Europe and Japan.
“These regions are either global hubs for advanced technologies or markets where we have established business operations. However, we plan to further expand our global reach by keeping abreast of trconcludes across a broader set of regions,” Yajima states.
The new 10-year fund is larger than the $69m first investment fund set up by the company and will allow Fujitsu to expand its remit. Fujitsu Ventures has so far invested in 17 startups, focutilized in areas such as AI and quantum computing, including taking part in the $11.2m series B round for Japanese quantum algorithm developer QunaSys. Fujitsu also backed US AI company Cohere, and has a strategic partnership with the company to create a Japanese large language model.
“Our fundamental principle is to align with Fujitsu’s strategic technology priorities. AI and quantum computing are crucial technologies for Fujitsu and potential sources of our competitive advantage, so we will continue to actively explore opportunities in these two areas,” Yajima states.
In the UK, Fujitsu has become notorious for the involvement of its UK subsidiary in the Horizon IT scandal where faulty software led many sub-postmasters to be accutilized of fraud. But in the rest of the world, Fujitsu is known for its work at the cutting edge of computing. It was recently awarded the contract, for example, to build the next generation flagship supercomputer in Japan.
Collaboration and M&A plans
Yajima also stated that Fujitsu Ventures, which sits within the department that oversees M&A and strategic alliances, is becoming a key way for the company to expand into new areas of business.
“Broadly speaking, we believe that the primary benefit that Fujitsu — the parent company — has gained is the establishment of a concrete execution tool for its inorganic growth strategy.”
Inorganic growth — ie mergers and acquisitions — is part of Fujitsu’s mid-term plan, and startup collaboration is a key first step in this.
“Our team believes CVCs should be an integral part of corporate strategy – utilized as a matter of course when formulating business plans or evaluating external collaboration opportunities. At a more granular level, effective investments allow us to realise benefits beyond simple partnerships and strategically position ourselves for potential future acquisitions,” states Yajima.
While the strategic partnership with Cohere may have had the most headlines, Fujitsu works with most of the portfolio companies that the ventures unit invests in.
“Notably, even within our impact investment portfolio – where immediate synergies are not always expected – new collaborations are emerging, which we view as a highly valuable outcome,” states Yajima.
Yajima would like to see even more of these collaboration successes, which is the reason that he is considering adding more portfolio development specialists to the eight-person team.
“Going forward, portfolio development will be a critical function. We plan to strengthen this area to enhance the value we deliver to our portfolio companies and to drive deeper collaboration with Fujitsu,” Yajima states.
The CVC team has had two exits, demonstrating that it can bring in financial returns. But Yajima is far more concerned with the strategic benefits Fujitsu Ventures can bring to the wider business.
“Our greatest achievement has been the growing awareness and integration of CVC across various business units over the past four years. CVC is now becoming a more widely recognised tool within Fujitsu,” Yajima informed GCV.
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