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[The Story Behind DG×Resona Partnership #04] Revitalizing Japan’s Economy Through Strategic Startup Investment
In 2022, Digital Garage and Resona Holdings formed a capital and business alliance aimed at strengthening their payment business, expanding market share, and advancing next-generation fintech business. By 2023, the partnership deepened further, extending into collaborative efforts in open innovation through startup investments. This four-part series explores the details of their collaboration and their shared vision for the future.
The fourth and final installment centers on Corporate Venture Capital (CVC). In April 2024, the two groups jointly established the ¥13 billion fund*, ”DG Resona Ventures Fund I Investment Limited Partnership (DGRV),” marking their official entry into the startup investment space. We spoke with key business and investment leaders from both groups about the motivations behind launching the CVC, their investment strategies, and their vision for the future.
* CVC (Corporate Venture Capital) refers to investment funds formed by companies using their own capital, primarily to invest in and support startup ventures.
＜Speakers＞
Hidefumi Kawabe; Executive Officer; Resona Holdings, Inc.
Yushi Harada; Representative Director and President; Resona Innovation Partners Co., Ltd.
Junichi Nakajima; Senior Executive Officer; Digital Garage, Inc.
Wataru Ishii; Senior Director; DG Ventures, Inc.
(Affiliations and titles are as of publication)
Open Innovation with Startups: Exploring the Unknown
The goal of the CVC fund is to drive business growth for both groups by leveraging the advanced technologies and novel business models developed by startups. For both groups, it was time to step beyond the bounds of their existing assets and explore new territory.
Kawabe: Traditionally, Resona has built most services in-house, largely due to the constraints of banking regulations. But with gradual deregulation over the past decade, it has become easier to partner with external companies and explore entirely new business domains. At the same time, non-financial players have started offering financial services, further intensifying competition. To remain relevant, we knew we had to step up our efforts in developing new businesses.
That said, there are clear limitations to what we can build on our own. That’s where open innovation with startups—entities that bring fresh ideas and technologies—comes into play. Our aim isn’t just financial return; we invest in startups that can create synergy with Resona Holdings, helping us expand into new business areas and unlock non-linear growth in existing ones.
Nakajima: At Digital Garage Group, we’ve been pursuing the group strategy “DG FinTech Shift,” focusing on creating new businesses by integrating payments, data, and technology. When the opportunity to collaborate with Resona emerged, we realized we shared a common direction—expanding into fintech. That mutual understanding laid the groundwork for launching a joint CVC fund.
Digital Garage and Resona each bring different strengths. We specialize in digital business development and have a strong track record in startup investment. Resona has an extensive customer base and a long history of offering a wide range of financial services. This complementary relationship allows us to deliver support that goes beyond what either of us could achieve alone.
Kawabe: As we explored the fintech business, we saw the value of partnering with Digital Garage, a frontrunner in this field. While Resona has experience with venture capital through its subsidiaries, this was our first foray into CVC. Digital Garage’s CVC expertise made them the ideal partner to co-create new businesses with startups.
Beyond Fintech: Investing with a Long-Term, Strategic View
We asked two of the fund’s front-line investors to explain DGRV’s strategy.
Harada: Our top priority is to select startups that can deliver not just financial, but also strategic returns. We primarily focus on fintech—where Digital Garage’s strength in IT and payments aligns with Resona’s financial expertise. We’re actively looking to invest in startups whose technologies and ideas can contribute to expanding our existing businesses.
But we’re also open to ventures outside fintech. We want to explore businesses from scratch, even in adjacent or unrelated fields, as long as we can offer new forms of value by leveraging our customer base and financial data.
Ishii: One recent example is our investment in a startup targeting younger generations—not traditionally considered part of the fintech domain. Japan’s aging population poses a shared challenge, and reaching younger demographics is crucial for both groups. We saw this as a step toward addressing that issue. We’re committed to evaluating all possibilities and investing with a long-term perspective, unbound by existing assets.
The number of CVCs is steadily increasing, with over 140 in existence as of 2023 and annual investment—by business corporations included—approaching ¥500 billion (Source: JAPAN CVC Report 2024). With a growing number of options available to startups seeking funding, narrowing our focus from the outset would not be a wise approach. Rather than taking a narrow view and limiting ourselves to specific sectors, we aim to engage with a wide range of startups and explore every possible avenue for collaboration.
Unlocking the Combined Assets of Two Expansive Business Groups
What sets DGRV apart from other CVCs? For startups, the biggest differentiator is access to the vast assets of both Digital Garage and Resona Holdings.
Ishii: Most CVCs—like those set up by electrical firms—tend to focus exclusively on startups within their industry. In contrast, DGRV is backed by two groups with broad business reach, which significantly expands the range of startups we can support.
Harada: Startups we invest in can potentially tap into both our customer bases and accumulated data. We hope to accelerate their growth by offering support that aligns with their strategies and leverages our unique strengths.
Ishii: We’re often asked whether DGRV is ”Resona” or ”Digital Garage.” The answer is—it’s both. We operate with the full backing of both groups and provide our portfolio companies with the combined assets of both.
Nakajima: Another strength of DGRV is our ability to connect startups with a wide range of other companies, not just within our groups. Since its founding, Digital Garage has cultivated a vast global network—from startups to large enterprises. If a portfolio company needs funding for its next round, we can help them connect with the right investors through our network. In that sense, DGRV serves as a gateway to a much broader ecosystem.
Empowering Startups to Revitalize Japan’s Economy
Finally, we asked what kind of future the two groups aim to create through DGRV.
Kawabe: In the 1990s, Bill Gates reportedly said, ‘Banking is necessary, but banks are not.’ That’s becoming a reality. The mechanisms of finance—deposit-taking, lending, and payments—haven’t changed much, but digital technology now allows us to execute them at unprecedented speed and scale.
At Resona Holdings, we believe it’s essential to maintain a physical presence while ensuring we remain relevant in the digital financial ecosystem. The launch of DGRV is a huge opportunity. By working with startups to develop embedded financial services, we can expand our value offering beyond traditional boundaries.
As a regionally rooted financial group, we’re also well-positioned to support local innovation. By deepening local partnerships, we hope to cultivate new businesses not just in Tokyo or Osaka, but across Japan.
Our ultimate objective is to contribute to the revitalization of Japan’s economy. By leveraging Resona Group’s expansive customer base and nationwide branch network to support the growth of startups, we aim to drive positive change in Japan’s economic landscape, which has historically faced challenges in achieving the level of dynamism seen in Western markets.
Nakajima: At Digital Garage Group, our goal remains to expand our core payment business and launch new ventures that address evolving societal needs. But instead of doing everything in-house, we want to partner with startups to gain exposure to cutting-edge technologies and ideas that we don’t yet have.
Ultimately, we hope to help Japan reclaim its former economic momentum. I’m nearly 50 now, and I remember when Japan’s economy was booming. But we missed the wave of technology adoption at some point—and have since lagged behind. Today, the U.S. has over 700 unicorns. Japan has just 14 (as of February 2024).
But I still believe we can catch up. I’m determined not to lose. Supporting startups in partnership with a major banking group like Resona means a lot. The balance of power may have shifted in just 30 years, but it’s not irreversible. I believe the key lies with startups—and I’m excited to take on this bold challenge with Resona to reignite Japan’s economy.
