Akatsuki Entertainment Technology Fund (AET Fund) is a venture capital fund established by Akatsuki Inc, a gaming-entertainment company based in Japan. The fund invests in new forms of entertainment technology, content and service startups utilising Augmented Reality (AR), Virtual Reality (VR), and Mixed Reality (MR). In India, it has made more than 15 investments since the fund was launched including in ventures such as SuperGaming, Doubtnut, Wysh and Little Black Book. Yuki Kawamura, partner and India project lead, AET Fund, tells Banasree Purkayastha that the fund is keen on backing startups offering vernacular content solutions to the next billion users coming from Bharat. Excerpts:
What are the areas of interest for AET Fund in India?
Principally we aim to invest in heart-driven businesses that are bringing joyful products and solutions to their consumers. We have invested across segments including content, media, gaming, and entertainment and we see vernacular content as a huge opportunity waiting to be tapped in India. Data penetration has grown in tier II and III towns and the vernacular content market is seeing an upsurge in terms of investments and monthly user growth.
However, the segment is largely unexplored with a large demand-supply gap. With the next billion users coming from ‘Bharat’, we want to partner with innovative and scalable ideas that cater to this segment.
How do you see the growth of the entertainment/ content startup segment in India?
Post Jio launch, India has seen tremendous growth in the number of internet users in India, an increase in smartphone penetration and a significant dip in data costs, especially in tier II and III towns. Content is increasingly being consumed across an array of devices and platforms, which has shifted the onus away from non-digital platforms while simultaneously heralding the fragmentation of this audience base. Faced with these figures, the pressing need for original, engaging content customised for Indian audiences has never been more apparent. The opportunity in the Indian entertainment and startup space is huge.
We have also found local startups to be extremely innovative. They aren’t just replicating successful concepts from US/China, Indian entrepreneurs are sensitive to local consumer preferences and more often than not their offerings are custom-created and relatable for the local consumer. One example is edtech startup Doubtnut, which is solving for lack of individual attention and doubt resolution amongst Indian school students studying in classes 6- 12. More than 90% of Doubtnut’s users are from non-metros—a direct outcome of being available in 11 regional languages.
We believe in investing in companies that drive happiness across a variety of categories in a heart-driven world. We have been fortunate to find similar values in Indian entrepreneurs we have invested in, backed with business strengths including great clarity of vision, immense passion, and commitment to execution.
What would be the average size of the investment you are looking at in new investees? Are you close to finalising any deals – early-stage, Series A or B?
We are focused on early-stage investments in India. We typically don’t share our ticket-size. We meet several interesting startups every day, many conversations are in progress, we will be happy to share more on this as and when we confirm.
Do you have a specific investment fund for India? What is the corpus size of this fund?
Our fund has a corpus of $50 million for investments in India and the US.