GLIN Impact Capital was founded in 2020 with the aspiration to contribute to the development of impact startups and the impact investment ecosystem in Japan and around the world. With the mission to “build a more sustainable capitalism,” GLIN Impact Capital provides impact/ESG investments in unlisted companies and startups in Japan and abroad, helping portfolio companies achieve sustainable growth and corporate value enhancement while pursuing their social mission.
In this article, we would like to introduce the types of startups in which GLIN invests as an impact/ESG investment fund.
1. Sectors of startups in which GLIN invests
GLIN invests in impact startups that solve social issues in Japan and other developed countries. Specifically, we focus on the following social issue areas
- Mental health and wellness
- Women’s advancement in society
- Social inclusion and diversity
- Environmental issues
- Declining birthrate
- Aging population
- Agriculture and food waste
The reason for focusing on these issues is that GLIN, as a global impact investment fund originating in Japan, believes that it can contribute to startups that address social issues where Japan lags behind the rest of the world and where Japan is making progress.
For example, there is an abundance of data showing that Japan is lagging behind the world in the areas 1-3 above, and that Japan is ahead of the world in the areas 5-7. For area 4, environmental issues, Japan is behind the world in the sense that it relies on thermal power generation for much of its energy and it has even won the “Fossil of the day” prize multiple times in international forums. On the other hand, Japan also has many world-leading clean-tech companies.
GLIN will support startups that address issues where Japan lags behind the rest of the world by leveraging our global knowledge, and also support startups that address issues where Japan is ahead of the world by building on Japan’s successful models to solve similar problems outside of Japan in the future.
2. Stage of the startups in which GLIN invests
GLIN invests in mid-later stage startups. To date, GLIN has invested in startups in the Series B to pre-IPO rounds. It has not invested in seed or Series A startups.
GLIN interviewed many impact entrepreneurs and accelerators when formulating the investment strategy for its fund. As a result, GLIN’s focus on this stage in its impact investing and post-investment support is based on its affinity for mid- and late-stage startups.
The GLIN team’s capability for post-investment support is to help impact startups accelerate their growth beyond the product market fit (PMF) stage, develop business strategies and build systems that enable them to sustain both business and impact during the stage of even greater growth after listing,. and business development and expansion utilizing GLIN’s overseas network.
Our representative partner Masato participates in the Impact IPO Working Group meetings as a committee member, and is involved in supporting impact startups in their transition from unlisted companies to listed companies and in the timing of major changes in shareholders and other stakeholders. In addition, we are also focusing on supporting the establishment of a system that enables impact startups to pursue impact and business growth in the new stage after listing.
3. Geographical Perspective
GLIN invests in unlisted companies in Japan and overseas (mainly in the US).
When investing in Japanese impact startups, GLIN hopes to support startups that solve social issues in Japan to expand their business globally and solve social issues around the world in the future.
When we invest in overseas impact startups (mainly in the U.S.), we would like to contribute to the development of global social issue resolution and impact investment as a fund, and we would like to return the knowledge and network we have cultivated through this practice to impact startups in Japan.
4. Financial return
GLIN invests in startups that create social impact while seeking financial returns at the same level as market rate impact investors, i.e., regular VC and growth investors.
When we were considering our investment strategy as an impact investment fund, we conducted interviews with many people in the Japanese economic and financial communities. What left a strong impression on us at that time was that many of them believed that “impact companies and businesses are not profitable”. We believe this is not true. As long as you invest in companies that have a positive correlation between business growth and impact creation, you should be able to achieve both financial return and impact creation by investing in impact companies. With the desire to first dispel this notion that “impact companies and businesses are not profitable,” we are focusing on creating a track record and examples of market-rate impact investing in our first fund.
As a result, we believe that we can promote the mainstreaming of impact investing and contribute to the transition to a world where financial and business valuation decisions that encompass economic externalities are the norm. We believe that impact startups will flourish, which is our mission, and that we will be able to build a society in which social issues are solved autonomously along with economic development.
In this article, we introduced the selection criteria of GLIN’s impact investments from the perspectives of sector, stage, geography, and financial return.
This year, thanks to all of you who support GLIN, we have closed fundraisers and are accelerating our investment activities. If your company is interested in investing from us, we would be more than happy to discuss with you. We look forward to hearing from you via our contact form.