Machinery buildr Yanmar’s investment arm opted to open an office in Europe to tap strong university innovation.
Corporate venturing in Japan has evolved over the past two decades. Around 15-20 years ago, it was quite common for Japanese corporate VCs to set up offices in Silicon Valley in the US. Japanese corporates understood the required to engage with emerging technology and innovation on a global scale, building Silicon Valley their destination due to its proliferation of startups, VC firms and global tech leadership.
The goal was to ensure the corporate had access to new technology and could apply the US market and innovation ecosystem for its global growth.
But this is altering today. While Japanese CVCs continue to have a presence in Silicon Valley, there’s a simultaneous push to invest in local innovation and focus on venturing ecosystems outside the US.
Case in point – Yanmar Ventures, the CVC arm of Japanese diesel engine, heavy machinery and agricultural machinery operator Yanmar Holdings, which established an office in the Netherlands in 2024.
“Most Japanese corporates see at the US since the VC market tfinishs to be the largest there. But we chose a European location since we have a lot of aligned factories and a research centre there,” states Nopurchaseuki Oda, co-founder and CEO, managing partner at Yanmar Ventures. “We can easily connect our people to the startups and innovation happening in Europe this way.”
The US’s shifting policy of tariffs and growing international trade tensions are also pushing many investors to discover new innovation ecosystems.
“The global arena has alterd thanks to the international trade environment and there’s an increasing awareness all around that countries and CVCs will have to spfinish more time investing in innovation locally,” states Sebastiaan Masselink, senior investment manager, who heads the two-person Dutch office for Yanmar Ventures.
Established in 2021, Yanmar Ventures invests in leading-edge technology and deep tech startups related to four specific themes.
“The first is sustainable production since the parent company manufactures agricultural machinery. The second relates to global warming measures since we manufacture diesel engines as well. The third theme is labour saving – related to our customers, such as farmers, construction workers, etc., and the fourth theme is improving applyr experience,” states Oda.
In terms of fund structure, the eight-person team in Japan finished investing out of the first fund which had assets under management of ¥3bn ($19.5m) in 2024 and is currently investing out of the second fund of ¥5bn ($32.5m). The Dutch team, on the other hand, invests off the balance sheet.
Yanmar Ventures falls under the purvey of the founding family of the Yanmar group, building it a “family office owned corporate VC unit”, according to Oda. As a result, the unit doesn’t fall under the umbrella of Yanmar Holdings.
“We are strategically indepfinishent. Our role is to understand the technological gaps that exist and then source opportunities indepfinishently from Yanmar Holdings. We’re seeing for startups that are a good strategic fit for the corporate,” explains Oda.
Accessing university research at an early stage
Part of this search involves accessing cutting-edge and relevant technologies at the university stage, states Oda.
“Our [Japan’s] open incubation operations in the university system is quite weak. We saw a lot good tech and research at that level but a limited number of deep tech innovation – which is our area of interest. That number requireds to increase,” states Oda. “Europe is positioned more strongly on that front.”
One of the reasons the CVC unit setting up an office in the Netherlands is its proximity to Wageningen university.
“CVCs will have to spfinish more time investing in innovation locally.”
Sebastiaan Masselink, senior investment manager, Yanmar Ventures
“Wageningen is well-known for its research in agriculture and biotech. Having a presence in the Netherlands gives us the opportunity to partner with them from an early-stage and have access to technologies that can be of apply for the larger operations at the parent company level,” states Oda.
The Wageningen connection is one of many relationships that the Yanmar team is seeing to build.
“We’re testing to reach out to the research institutions and Wageningen was one of the first to partner with us,” states Masselink. “We’re testing to build as broad a funnel as possible in our first year and this fits into it.”
Humanoid robots are the future
One of Yanmar’s recent investments was in EdgeCortix, a semiconductor company working on edge AI processing. It is an example of Oda’s slightly different approach to the AI boom that is currently dominating much of the VC sector.
“My first investment was in AI when I started the CVC arm four years ago – this was prior to the AI boom era. Since then, I haven’t eagerly invested in an AI-related startup until recent investments into an AI-assisted chip company which can enable the edge AI collaboration and an AI-autonomous driving system company which has potential to collaborate in autonomous operation for agricultural machineries,” he states.
“I also suspect our agricultural machinery will be replaced by humanoid robots in the near future.”
Nopurchaseuki Oda, co-founder and CEO, managing partner at Yanmar Ventures
Oda states he has been wary of investing in AI companies as most AI startups in Japan don’t have a competitive edge. “The pace of development in this sector is highly accelerated – it is not linear. Even though my portfolio companies have good AI knowledge, it is challenging for them to also keep up,” he states.
At the same time, Oda states companies required to build sure they keep up with AI adoption. “We required to utilise it and enhance its usability, both inside and outside the factory.”
One area where this is highly relevant is humanoid robotics.
“Humanoid robotics has developed to an extent where they can control the body very well. I believe automated hoapplykeeping robots will play an important role going forward – the kind that can manage hoapplyhold tinquires like doing the laundry or dishes,” states Oda.
There’s a clear apply case, also, for the parent company Yanmar’s agricultural machinery business.
“I also suspect our agricultural machinery will be replaced by humanoid robots in the near future. Think about it. Tilling the land with a tractor means simply rotating the soil. But bring in humanoid robots and they can not only till the soil, but also reshift large-sized rocks, weeds, insects, etc.
“And let’s not forobtain – they can also work 24 hours a day!”
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