Mitsubishi UFJ Launches Funding Initiative to Bolster AI Startups in U.S. and Israel

MUFG Innovation Partners (MUIP), a subsidiary of Japan’s Mitsubishi UFJ Financial Group, has initiated a 20 billion yen ($136 million) fund aimed at overseas startups, emphasizing generative artificial intelligence technology. 

The fund seeks to support fintech-related ventures in countries like the U.S. and Israel, fostering the development of financial services utilizing generative AI. 

MUIP’s collaboration extends beyond its parent company, MUFG Bank, to include foreign banks within the group, such as Thailand’s Bank of Ayudhya and Indonesia’s Bank Danamon, to encourage corporate clients to integrate technologies from the fund’s portfolio.

In addition, MUIP’s new fund represents a strategic move to bolster investments in emerging businesses, particularly as global interest rates rise, making fundraising more challenging for startups. Since its establishment in 2019, MUIP has actively managed multiple funds, including one this year that specializes in Indonesian startups. 

So far, MUIP has infused capital into over 40 companies, significantly surpassing its 2021 investment amount, having allocated approximately 10 billion yen in 2022. Notably, one of its investments in Liquidity Capital led to a partnership between MUFG and the Israeli startup, focusing on an AI-driven lending venture. 

This initiative aligns with a broader trend among major Japanese banks, such as Sumitomo Mitsui Banking Corp. and Mizuho Financial Group, which are also actively investing in startups to harness cutting-edge technologies. MUFG plans to invest approximately 570 billion yen groupwide, including within its banking unit.

In 2022, MUFG entered the metaverse by partnering with Sompo Japan Insurance Inc. and the metaverse platform GranWhale. It introduced the group’s first Web3 feature and recognized virtual worlds as a crucial channel for accessing financial services. 

Next year, MUFG will launch a cross-chain stablecoin issuance and interoperability platform called Progmat Coin. The company collaborated with Tokyo-based Datachain and Dubai-based Toki to establish liquidity pools for various blockchain networks, including Ethereum, Cosmos, Avalanche, and Polygon.