Hitachi Ventures Secures $400 Million for Fourth Fund

Hitachi Ventures has secured $400 million for its fourth fund, a significant investment that reflects the firm’s confidence in a range of deep tech verticals. This new fund size is a vote of confidence in the corporate venture capital (VC) firm’s ability to identify and invest in innovative technologies that align with its corporate partners’ businesses.

Focus on Deep Tech Verticals

The size of the new fund is a testament to Hitachi Ventures’ focus on deep tech verticals, including energy, manufacturing, biotech, and AI. The firm’s portfolio mimics that of its limited partners, with a clear emphasis on investing in breakthrough opportunities. Managing Director and CEO Stefan Gabriel stated, "We are open to other breakthrough opportunities. There’s a lot around quantum, nuclear, life science, space tech. Not too broad — we have a clear view on what excites us in these areas."

Investment Strategy

Hitachi Ventures will continue to focus on Series A investments, with an average investment size of around $5 million. The firm is reserving around 55% of its capital for follow-on opportunities, indicating a commitment to supporting portfolio companies throughout their growth journey. Partner Gayathri Radhakrishnan noted, "That is still the sweet spot."

Unconventional Structure

Despite its name, Hitachi Ventures is a bit of an outlier in the corporate VC world. The firm is structured more like a typical venture fund, with Hitachi serving as the sole limited partner. The investment committee is composed of the firm’s partners, and they do not have to run possible investments past its corporate affiliate. However, the firm still works closely with Hitachi to help portfolio companies understand what a potential future customer is looking for.

Key Role in Portfolio Companies’ Success

Like other corporate venture capital firms, Hitachi Ventures serves as a scout, scouring through pitches to find smaller companies and technologies that fit its corporate partners’ businesses. The firm can make key introductions, but ultimately, it is up to the portfolio companies to sell themselves. Partner Pete Bastien stated, "We can put you in front of Hitachi, but your product needs to sell itself."

Previous Investments

Hitachi Ventures’ previous investments span a range of verticals, including energy, AI, and manufacturing. The firm has invested in companies such as Ascend Elements, a battery recycler; Thea Energy, a fusion startup; and Wase, a wastewater-to-energy company. Its AI investments have focused on workplace applications, including Ema, a universal AI employee; Strikeready, a cybersecurity company; and Makersite, an AI-powered supply chain management company.

Conclusion

Hitachi Ventures’ $400 million fundraise is a significant investment in the firm’s ability to identify and invest in innovative technologies that align with its corporate partners’ businesses. With a focus on deep tech verticals and a commitment to supporting portfolio companies throughout their growth journey, Hitachi Ventures is well-positioned to continue making a positive impact in the venture capital landscape.