10th July 2020: Yokogawa Electric Corporation (TOKYO: 6841) announces that it has signed an agreement to invest in the Nippon India Digital Innovation Fund of Funds*1 (below, “FoF” *2) to accelerate its business expansion in India. Yokogawa will pursue open innovation with promising Indian startup companies and acquire leading-edge technologies and information at an early stage to support the development of new businesses.
Yokogawa established a local subsidiary in the Indian market in 1987 and has since been delivering control systems for plants in the energy industry, monitoring systems for water supply and wastewater networks, and other products and solutions for industry. With the recent diversification of customer needs, rapid technological innovation, and increased competition in global markets, the company is promoting an open innovation approach. In India, in addition to undertaking digital transformation of existing businesses, Yokogawa will focus on developing new markets related to biotechnology, life sciences, water, the ocean, and space.
The investment in the FoF is expected to provide access to the latest information on hundreds of leading startups, create opportunities for alliances, enable the transformation of existing businesses and entry into new markets, and accelerate innovation through the acquisition of advanced technologies. Regional subsidiary Yokogawa Technology Solutions India will develop relationships with the startups, and opportunities will be leveraged across the entire Group.
The FoF was formed as an initiative under the India-Japan Digital Partnership*3 with the encouragement and support of the prime ministers of both countries. It will be managed by Nippon Life India AIF Management Limited (NIAIF), a subsidiary of Nippon Life India Asset Management Limited (NAM India). The FoF will invest in approximately 15-20 venture capital funds in India. The investment field covers a wide range of areas, including AI, IoT, biotechnology, life sciences, security, automation, and blockchain.
Sundeep Sikka, executive director and CEO of NAM India, commented, “We complement Yokogawa Electric Corporation for their effort & support to the Nippon India Digital Innovation FoF. This FoF is focused on investing in early stage venture capital funds in India and shall play a catalytic role in enabling Japanese institutions and corporates to access and leverage digital innovation from Indian startups. Yokogawa joins a growing list of large institutions and corporates from Japan who have now invested in this unique India-Japan FoF, a true example of collaborations targeted under the India-Japan Digital Partnership, further enhancing the strategic partnership between India and Japan.”
Tsuyoshi Abe, a Yokogawa senior vice president and head of the Marketing Headquarters, added, “Yokogawa has continued to invest strategically in expanding its business in India, and we are contributing to the “Make in India” initiative both through our own local manufacturing and engineering operations, and through partnership with local manufacturing companies. Moving forward, we will accelerate the creation of innovation through digital transformation in the industrial automation segment that is our core business, and also in the emerging life innovation segment, both in India and globally. By actively participating in the FoF, we will greatly expand our opportunities to promote co-innovation with leading startups and unicorns. In recent years, our company has been focusing on open innovation, and we believe that the collaboration with the FoF will greatly accelerate the creation of new businesses out of India.”
*1 Official fund name: Nippon India Digital Innovation AIF – Scheme 1. A Japan-India initiative to support venture capital funds investing in startups in fast-growing India. The purpose is to foster Indian startups, promote collaboration between India, which is strong in software, and Japanese companies, which are strong in hardware, and commit to strengthening the industrial competitiveness of both countries.
*2 Fund of funds: A fund that holds a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities
*3 A memorandum of cooperation concluded between the Governments of Japan and India on October 29, 2018. It declares cooperation in areas such as startup collaboration in the digital field, inter-company collaboration, IT human resources, research and development on AI, next-generation networks, and electronics.