Mitsubishi UFJ Financial Group’s core banking subsidiary MUFG Bank has signed a limited partnership agreement with general partner Mars Growth Capital for establishing a new debt fund (Fund 2), with target companies being pre-unicorn and unicorn companies.
Mars Growth Capital, a joint venture between MUFG Bank and Liquidity Capital, an Israeli fintech company, has been providing debt finance to mainly middle-stage startups through Fund 1 by utilizing a unique AI credit scoring model developed by Liquidity Capital.
In September 2021, MUFG Bank increased its LP commitment to Fund 1 from $80 million to $200 million, in light of potential opportunities for further business expansion. As of December 2021, Mars Growth Capital has signed loan agreements with 12 growing startup companies. Fund 2 will provide debt financing to later-stage pre-unicorn and unicorn companies, which aim to go public in the near future.
MUFG Bank’s LP commitment to Fund 2 is $300 million, and MUFG aims to provide a wide range of financial services to these companies in the future. Since the start of the pandemic, the digital shift in society continues to accelerate and online services continue to gain popularity in the Asia-Pacific region. Tech companies have contributed greatly to this trend, with many becoming unicorns and an increasing number completing IPOs in recent years.
By providing financial support to startups throughout their entire growth cycle through Fund 1 and Fund 2, MUFG Bank is enhancing its commitment to developing new industries and solving social issues.