Sumitomo Mitsui Banking Corp. will launch a $300 million venture capital fund targeting artificial intelligence and financial technology startups, marking the Japanese lender’s latest attempt to capture returns from the rapidly expanding U.S. tech sector.
The SMBC Fin Atlas Beyond Fund will operate for 10 years in partnership with San Francisco-based Fin Capital, with SMBC providing the majority of the capital. The fund will focus on U.S. companies developing payment systems, financing platforms and wealth management technologies, as well as AI applications.
The venture represents SMBC’s continued push into Silicon Valley-style investing, following its $200 million Asia-focused fund launched in 2023 and existing venture capital operations through its SMBC Venture Capital arm. Traditional Japanese banks have increasingly turned to startup investing as domestic lending margins remain under pressure from ultra-low interest rates.
Fin Capital, founded in 2018, manages $1.3 billion in assets and specializes in B2B fintech software across eight sub-sectors including enterprise AI and payments. The partnership aims to generate investment returns while fostering business relationships that could benefit SMBC’s core banking operations.
Corporate venture capital funds raised $73.1 billion globally in 2024, according to CB Insights, as established companies seek exposure to emerging technologies that could disrupt their industries. Japanese financial institutions have been particularly active, with rivals including Mitsubishi UFJ and Mizuho also establishing Silicon Valley presence.
The fund’s focus on AI startups comes as financial services firms race to integrate machine learning capabilities for everything from fraud detection to customer service. However, the sector faces headwinds from rising interest rates that have cooled startup valuations and made fundraising more challenging for early-stage companies.
SMBC’s strategy mirrors efforts by other global banks to access innovation through direct investment rather than internal development alone. The approach allows established lenders to evaluate potential acquisition targets while gaining insights into emerging business models that could reshape financial services.
