Japan’s MUFG Bank Plans To Invest in Mid to Late Stage Indian Startups

The financial unit of Japan’s Mitsubishi UFJ Financial Group, MUFG Bank, has announced plans to invest $300 million in Indian startups through its ‘Ganesha’ fund.

The decision came after the financial services major renewed its joint venture with Liquidity Capital, Mars Growth Capital, a debt venture fund. The JV’s second fund aims to invest $300 million in debt financing in late-stage pre-unicorn and unicorn firms that are ready to go public, with a particular focus on Asian-Pacific entrepreneurs.

The fund invests in firms with average ticket sizes ranging from $2 million to $30 million. Zetwerk, Dispirz, Hiver, and Bizongo are among the notable Indian firms that have received loan capital from MUFG’s Mars Growth Capital.

“We will continue to help to the creation of new sectors and the sustainable development of local communities by financially supporting the growth of startups in India,” MUFG Bank stated of the Ganesha Fund. MUFG will use the fund to foster collaboration with potential IT and IT startups as well as explore new commercial prospects.”

While the fund’s details have yet to be revealed, MUFG has suggested that it would support expansion to late-stage digital businesses, with an emphasis on fintech, environmental sustainability, and renewable energy.

With the fund, the company hopes to offer a broader range of financial services to its portfolio companies, including loans and financing, trust banking, securities, credit cards, and leasing, as well as corporate services like stock listing, mergers and acquisitions, and business development in foreign markets.

With this, MUFG Bank’s investment arm joins other Japanese investors in India’s startup industry, including Akatsuki Entertainment Technology (AET) Fund, Incubate Fund, Mistletoe, and SoftBank.

Fears of a worldwide conflict have frightened VCs and startup investors in India and throughout the world, prompting the corporation to fund Indian companies. This culminated in a sharp sell-off in December 2021 and January 2022, wiping billions off the market valuation of publicly-traded tech businesses.

On the other side, because VCs have migrated to new industries and smaller investments in early-stage businesses, there is an evident trend of late-stage firms failing to obtain investors. For example, in the week of March 5, 2022, Indian companies raised just $233 million in 32 agreements, with no megadeals above $100 million.