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Indianapolis-based High Alpha Innovation has teamed up with a Japanese venture capital firm, DNX Ventures, to launch a Tokyo venture studio focused on software startups in that country.
The partnership represents the first time that High Alpha Innovation has helped launch a non-U.S.-based venture studio.
High Alpha Innovation, which launched in 2020, works with organizations such as universities and large corporations to help them create and launch startups. The entity is a spinoff of Indianapolis venture studio High Alpha, which creates and launches business-to-business software-as-a-service, or SaaS, startups. The two now operate as separate entities.
DNX Ventures, which launched in 2011, has offices in both Tokyo and San Mateo, California. To date the firm has invested in 190 startups, with a focus on sectors including cloud-based SaaS, financial tech and climate tech.
The U.S. is home to robust startup activity, but that’s not the case in Japan—which is what makes that country appealing for firms like High Alpha Innovation, Managing Director Ryan Larcom said.
“The Japanese economy is still about 15 years behind the U.S. economy with respect to startup creation,” Larcom said. “So we think there’s a huge opportunity for business-to-business SaaS startups to scale and grow and serve the Japanese market.”
According to data provided by DNX Ventures, startup investment in Japan has grown tenfold over the last decade, reaching about $6 billion last year. (In comparison, U.S. firms landed about $170.6 billion in venture investment last year, according to data from PitchBook.)
High Alpha Innovation helped DNX Ventures develop its venture studio, which twice a year will offer a three- to six-month program to help entrepreneurs build and launch startups. The studio will also support these startups post-launch.
Upon completion of the program, startups can receive seed funding of up to 50 million yen (about $327,000 at the current exchange rate).
High Alpha Innovation has not made any financial investment in DNX Ventures or its new studio, called DNX Studio. But as startups launch out of the studio, High Alpha Innovation will take an ownership stake in those startups. Larcum said he expects the first DNX Ventures startups to launch in the third quarter of 2025.
The initial agreement between DNX and High Alpha Innovation is for three years. High Alpha Innovation hopes to continue working with DNX beyond that if all goes well.
DNX Studio is the sixth venture studio that High Alpha Innovation has helped create.
In Indiana, the firm has worked with the University of Notre Dame to create 1842 Studio, which focuses on software startups that target societal challenges. It’s also worked with Purdue University to create DIAL Ventures, which launches ag-focused software startups. (DIAL is a nod to the studio’s original name, which was Digital Innovation and Agri-food Systems Lab.)
Outside of the Hoosier state, High Alpha Innovation has also worked with the University of North Carolina to launch the Eshelman Innovation Venture Studio, which focuses on digital health care startups. It has also worked with the nonprofit organization VentureWell to establish Bentonville, Arkansas-based Fieldbook Venture Studio, which launched with a $5.75 million grant from the Walton Family Foundation.
High Alpha Innovation also worked with the University of Wisconsin-Madison and the Wisconsin Alumni Research Foundation to establish Varsity Venture Studio in October 2020. That studio is no longer active.
High Alpha Innovation also has worked with a range of companies including Elanco Animal Health, Koch Industries and others to help those companies create and launch startups.
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