MUFJ Financial Group Announces Two New Venture Debt Funds Targeting Japanese And EU Startups

By: Asia Business Outlook Team | Monday, 08 May 2023

Mitsubishi UFJ Financial Group Inc (MUFG) announced the launch of two new venture debt funds totaling $400 million for Japanese and European startups, reflecting strong funding demand as the market for initial public offerings remains subdued.

The debt funds will be created through Mars Growth Capital, a Singapore-based joint venture between MUFG and Israeli financial tech firm Liquidity Capital, the top Japanese lender said on Monday.

With rising interest rates and market volatility reducing investment flows and demand for new stock listings globally, startup demand for venture debt has increased.

Mars has provided debt financing to 30 middle and later stage startups in Asia through two existing funds totaling $750 million since its inception in 2021.

"We've seen very strong needs for debt financing in the (startup) market," Mars co-CEO Ryutaro Hiroshima said at a press conference. "We've decided to expand our business in order to meet such high demand."

According to MUFG, debt financing is also in high demand because it allows startups to raise funds without diluting their existing shareholder equity or ownership.

The new Europe fund will receive capital from existing funds, while the Japan fund will receive new capital from MUFG and other investors.

Mars has provided debt financing to 30 middle and later stage startups in Asia through two existing funds totaling $750 million since its inception in 2021.

According to MUFG, debt financing is also in high demand because it allows startups to raise funds without diluting their existing shareholder equity or ownership.

The new Europe fund will receive capital from existing funds, while the Japan fund will receive new capital from MUFG and other investors.