In our new article series, we introduce the most exciting venture capital firms that are open for LP investments to our family office network. The article belongs to our exclusive single-family office guidebook, where we give guidance on the most relevant topics for newly established and already existing family investment vehicles.
In this article, we talked to DNX Ventures, a highly active B2B early-stage fund with offices in Tokyo and Silicon Valley. Mark Bailey, co-founder of the B5 Capital single-family office recommended DNX with the following words for us:
“We chose to invest in and work closely with DNX Ventures because of the high caliber of the team. The team is personable, bright and well connected.We also like the value proposition that DNX offers portfolio companies. In addition to being helpful in general, the DNX team has a very impressive track record of helping their portfolio companies rapidly scale their business in Japan. Given the considerable size of the Japanese market, ramping business in Japan can significantly contribute to a company’s growth, which in turn increases shareholder value.”
We are happy to introduce DNX with such a recommendation to you and our family office network; elaborating on DNX’s investment focus and highlights from their portfolio.
Familyofficehub.io (FO): Briefly describe your focus: in which kind of startups are you investing, where is your geographical focus, what’s your average ticket size?
DNX: DNX is a venture capital fund that has been investing in B2B startups in the US and Japan. Our primary investment sectors include cloud and enterprise software, cybersecurity, frontier tech, fintech, and retail tech. The average initial check size is $1-5M.
FO: What are exciting companies in your portfolio – and why?
DNX: We want to highlight two firms from our portfolio.
ANDPAD (Japanese Investment): ANDPAD is a project management and collaboration tool for construction managers to communicate with subcontractors: create new projects, share key documents, communicate with construction workers, and manage progress through a mobile-first interface. Think of a souped up Slack that manages communication, schedules, reporting, mapping, project management for construction – all this on cloud. This changes the way it was done before – combination of pencil & paper, and fax – massive delays. Massive amount of hours/day spent by supervisors to just see if everything is ok.
They’ve started as a collaboration tool for residential contractors but now they are aiming to become THE cloud software for the construction industry: They are planning to expand their product line to ERP, EDI, contact management and others. In addition, they are aiming to go after a broader construction market. DNX has invested in the company as a lead investor in series A held in 2018. The company has gone through a ¥4B (~$40M) series C in 2020 adding global VCs and institutional investors on the captable. They are one of the fastest growing SaaS company in Japan accomplishing faster growth than Twilio when they were about the same stage and plan to become a Procore of Japan construction
ICEYE (US Investment): ICEYE is a leading Synthetic-Aperture Radar (SAR) data provider based in Helsinki, Finland. ICEYE designs, manufactures and operates its SAR satellites and associated constellations. Since the successful January 2018 launch of the first ICEYE SAR satellite, the company has delivered cutting edge, high spatial and temporal resolution SAR imaging services and solutions to global customers. Recently, ICEYE has demonstrated record time data deliveries of 5 minutes from the start of data downlink to having processed images available on customer systems. Its solutions are bringing efficiencies in insurance, construction, agriculture, maritime, forestry and government defense sectors.
DNX initially invested in ICEYE at their Series A round in 2017 and continued supporting the company through their Series B and C rounds. They recently announced $87M Series C funding led by True Ventures to further expand the SAR satellite constellation. To date, ICEYE has successfully launched 5 satellite missions, starting with the first ever small SAR satellite launched in January 2018. The company is launching 4 additional SAR satellites this year and is on course to launch at least an additional 8 in 2021. This will grow the existing operational constellation into a capability that is unique in the World.
One of our corporate LPs, Tokio Marine, announced their partnership with ICEYE’s flood detection technology in Dec 2020 which is a result of DNX’s initial introduction back in 2018. With ICEYE’s technology, Tokio Marine expects to significantly reduce the time to serve its customers during disasters and bring massive operational efficiencies. While developing relationships with other business prospects in Japan, ICEYE is now looking into opening up the Japan office in 2021-2022.
FO: Why should a family office invest in DNX Ventures as LP?
DNX: At the early stages of the company, DNX as an independent and institutional VC is able to do the heavy lifting of sourcing, conducting due diligence, and helping portfolio companies in their governance, hiring, customer development efforts, and reserving follow-on capital. This is particularly important in a geography like Japan, where additional cultural and language barriers make it tough for family offices to invest in the startup ecosystem directly.
DNX offers co-investment opportunities to our Investors. Once the companies are able to find product-market fit, scale their team and revenues, family offices can co-invest directly with DNX.
FO: Are you also open to investments from European family offices?
DNX: Yes. We are not limiting the potential LPs by geography at this point.
FO: Thanks for your time!
Headquarters: Tokyo (Japan), Silicon Valley (United States)