Venture Business Review in Japan 2008~2009

Transcription

1 Venture Business Review in Japan 28~29 Venture business IPO activity has fallen sharply since 27 after the second highest 188 companies have gone public in 26. A number of corporate and accounting scandals eroded public confidence in the securities market and consequently tightening the listing requirements reduced IPOs. In 29 Japan saw 19 IPOs, a 6% fall in deal numbers from previous year, which also saw big decrease. This level was the smallest number since Due to great decrease in IPO activity, decline in VC investment and downturn in economy, Japanese venture businesses faced a tough time for raising money. Under such difficult conditions, some venture businesses attempted to collaborate with foreign capital, shift both production and funding overseas and to seek options other than IPO as an exit strategy. Venture capital In 28 1 venture capitals invested 137 billion 2, about 3% decrease from the previous year. 23 new funds were organized, which raised 84.8 billion and the average number of partnership members dropped down from 14.2 in 27 to 4.5 in As a result, investment share of general partners was pushed up to 6.2% (36.6% in previous year). Decline of the VC investment has followed the fall of IPO activity. In 29, only 7 VC-backed companies have gone public, which made it difficult for VCs to secure adequate resources for new investment. The Japanese VC business model which depends only on IPO as an exit strategy are encouraged to undertake a strategic change; improving expertise and abilities of venture capitalists, taking an active role in management of the firm in which they invest, focusing on seed or early stage investment and diversifying from IPO only strategy. 1 Fiscal year (28/4~29/3) and reporting period of the survey 2 Venture capital or venture fund investment 1

2 Fig1-1. of IPOs 22 to (188) (175) 24 (158) (124) (121) (121) IPOs on the main stock exchanges1) IPOs on the smallcompany stock exchanges2) (49) Total number of IPOs (19) ) TSE1,2(Tokyo), OSE1,2(Osaka), NSE1,2(Nagoya), FSE(Fukuoka), SSE(Sapporo) 2) Jasdaq, Mothers(TSE), Hercules(OSE), Centrex(NSE), Q-Board(FSE), Ambitious(SSE), NEO(Jasdaq) Fig1-2. Venture 23 to 28 billion yen deals FY 24FY 25FY 26FY 27FY 28FY Amount, left axis of Deals, right axis Fig1-3. Exit situation of investment recipients FY 24FY 25FY 26FY 27FY 28FY IPO Write off, Liquidation Trade sales, Buyback Other Source: VEC survey report of each year 2

3 Summary Reports of Japanese Venture s And Benchmark 28/4~29/3 Fig2-1. Venture s 1) (billion yen) Total New Fig2-2. Y/Y growth rate of Venture s (%) Total investment Follow-on Valid Respons 23FY 2) FY FY FY FY FY Valid Respons 2) 23FY 1) 11.2% 17.3% -8.8% 74 24FY 31.1% 24.6% 65.1% 78 25FY 46.1% 49.2% 31.7% 7 26FY 14.5% 5.2% 55.% 68 27FY -33.2% -24.4% -6.9% 69 28FY -29.7% -36.% 12.7% 62 1)FY runs from April of the prior year to March of the next year 2)the number of VCs replying the total amount for two years in a row Fig2-3. Venture s 1) ( of deals) Total New Follow-on Valid Respons 23FY 2) 2,13 1, , FY 2,754 1, , FY 2,832 2, , FY 2,773 2, , FY 2,577 1, , FY 1,

4 Fig2-4. Y/Y growth rate of the deals (%) Total 23FY 1) -5.7%.7% -16.3% 72 24FY 31.2% 23.1% 27.9% 77 25FY 13.5% 15.% 7.8% 72 26FY -.9% 4.% -16.1% 69 27FY -7.9% -8.1% -5.6% 7 28FY -5.4% -5.5% -48.2% 63 1)FY runs from April of the prior year to March of the next year 2)the number of VCs replying the total amount for two years in a row Fig2-5. General Situation of Venture s 1) Fig2-6. Year-end growth rate of Average Size 1) (%) Fig2-7. Exit Situation of recipients 1) Valid Respons 2) Established Terminated Total Commitment to the VC s as of End of Mar. 29 Total Average No. Total Average No. Total Average Cumulative Average No. Amount of of Partnership Amount of of Partnership Amount of of Partnership s 2) s 2) s 2) Size 2) 23FY 3) , FY , FY , FY , FY , FY , )billion yen of the total commitment to the funds 3)FY runs from April of the prior year to March of the next year Average Size Average No. of Partnership 23FY 2) -.9% 1.5% 24FY -.4% -1.4% 25FY 8.% -.6% 26FY 8.1% 1.8% 27FY 2.4%.2% 28FY 2.9% -2.9% 1)based on the VCs replying both the number of funds and total amount of funds(or about menbers) 23FY 24FY 25FY 26FY 27FY 28FY IPO Write-off, Liquidation Trade sales, Buyback Other Total 929 1,

5 Fig2-8. by Inception Year Inception No of funds Year Total Liquidated Existing ' ' ' ' '86 ' ' ' '9 9 9 ' ' '93 ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' '9 3 3 Total Fig2-9. Distribution of IRR IRR 6%~ 7 5%~6% 1 4%~5% 3%~4% 3 2%~3% 8 15%~2% 6 1%~15% 13 5%~1% 26 %~5% 63-5%~% 7-1%~-5% 82-15%~-1% 54-2%~-15% 41-3%~-2% 21-4%~-3 6-5%~-4% 5-6%~-5% 2 ~-6% 6 Total 414 5