Japan-based venture capital firm UNLEASH Capital Partners has closed its maiden fund at Rs 300 crore to back early-stage Indian fintech and financial services startups, the firm announced on September 30.
The sector-focused vehicle, co-general partnered by Tokyo-headquartered Gojo & Company, Inc., has already made seven investments and plans to fund a total of 12–15 companies over the next 12–18 months, the firm's founder and Managing Partner, Natsuki Sugai, told Moneycontrol.
The fund, oversubscribed by about 10 percent against its $30 million target, has raised capital from around 35 Japan-based investors, including institutions and ultra-high-net-worth individuals. It will write cheques ranging from Rs 5 crore to Rs 18 crore, with 30–40 percent of the corpus reserved for follow-on rounds.
Why are Japanese investors putting money into Indian fintech?
According to Sugai, many Japanese investors are keen to participate in India’s fintech opportunity but are hesitant to invest directly because of governance concerns and unfamiliarity with the market.
“From the Japanese investor perspective, emerging-market early-stage venture capital is the riskiest asset class. Many have had mixed experiences doing business in India in the past. That’s why they need a partner for screening and collaboration. That’s why we are here,” he said.
Around 90 percent of the fund’s capital has come from institutional investors, with the remainder contributed by ultra-wealthy individuals and family offices.
“Our goal is to become the trusted bridge between Japanese capital and credible Indian startups. We want to make it easier for Japanese investors to participate confidently, and for Indian founders to access new pools of capital and strategic opportunities,” Sugai added.
Why is UNLEASH focusing on India now?
Sugai pointed to three reasons: local presence, market timing, and the scale of the financial inclusion opportunity. UNLEASH has built a four-member team in India led by co-founder Sohil Shah. He added that the correction in startup valuations since late 2022 has created a more attractive entry point for investors.
“The market correction has created a healthier environment for both investors and founders. Valuations are more reasonable, and the quality of entrepreneurs entering fintech has improved significantly,” he said.
The third factor is structural. With 1.4 billion people and significant gaps in access to credit and financial services, Sugai said India presents one of the largest opportunities globally for building financial inclusion.
What kinds of startups will the fund back?
The fund will focus on startups directly providing financial services to underserved users as well as those building enabling infrastructure. Target segments include lending, fintech infrastructure such as compliance and data platforms, embedded finance in sectors like agriculture and mobility, payments, and insurance.
Sugai said fintech infrastructure is especially promising, given how Indian banks and incumbents are increasingly adopting newer technologies to drive efficiency.
How does UNLEASH differentiate itself from other early-stage funds?
The firm is positioning itself as a specialist investor with three key differentiators: deep domain expertise in financial services, an equal emphasis on social impact and financial returns, and the ability to provide cross-border access to Japanese capital and networks.
Through its LPs, UNLEASH can help portfolio companies tap lower-cost debt from Japanese lenders and potential equity partnerships, while also connecting them to strategic investors.
How is it managing expectations from cautious Japanese LPs?
Sugai acknowledged that Japanese LPs are conservative and typically view emerging-market venture as high-risk. He said UNLEASH has set realistic performance expectations, with return targets aligned to what Indian domestic LPs expect.
“Best-case scenario, our DPI target would be five to six times. We don’t give unnecessarily high expectations. There’s no magic—just clarity on strategy and execution,” he said.
A timely close amid VC fundraising revival
The fund close comes at a time when VC fundraising in India is showing signs of revival after a year-long lull. Moneycontrol reported earlier that venture capital fundraising so far in 2025 has already crossed $3.2 billion, compared to $2.7 billion raised in the whole of 2024 — a five-year low, according to a Bain & Company–IVCA report.
Several funds have been announced this year by Accel, Bessemer Venture Partners, A91 Partners, Elev8 Ventures and others, indicating a renewed appetite among venture investors after a muted 2023–24 cycle.
What’s next for the fund?
UNLEASH has already deployed capital into seven startups, with one more investment under execution. That leaves room for another four to seven deals from Fund I. Sugai said the firm expects to complete portfolio construction in 12–18 months, after which it will consider raising a second fund.
For now, the focus is on building a concentrated portfolio of fintech and financial services startups while acting as a bridge for Japanese capital looking to participate more actively in India’s startup ecosystem.
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