How Nao Murakami Built Incubate Fund Asia Into Japan's Most Successful India Bet
While Asian venture funding crashed to decade lows, this former investment banker's methodical approach to cross-cultural investing produced two IPO-bound companies and a $260 million fund empire
In a small Tokyo izakaya in 2016, over drinks and yakitori, two men made a decision that would reshape how Japanese capital flows into India’s startup ecosystem. The conversation lasted just 45 minutes. One man was Akaura-san, founding partner of Incubate Fund Asia, who's living proof that life can take you on the wildest rides, The other was Nao Murakami, a recently failed entrepreneur looking for his next chapter.
Today, that casual conversation has produced Captain Fresh, a seafood supply chain startup preparing for a $400 million IPO, and Yulu, an electric vehicle sharing platform that achieved EBITDA positivity while competitors burned through venture capital. As Asian startup funding collapsed to a 10-year low of $65.8 billion in 2024, Murakami’s portfolio companies represent a masterclass in contrarian investing and cultural adaptation.
Check out the video of the conversation here or read on for insights.
The Investment Banker’s Dilemma
Murakami’s path to venture capital began with a crisis of purpose at Nomura Securities, where he spent 6.5 years covering Japanese and US tech IPOs. By 2014, the work that once energized him felt routine.
“I used to be an investment banker at Nomura in Japan and also in the US, covering all these startups, especially tech and internet startups,” he recalls. “When I was in New York, I just got technically bored of the investment banking career.”
The timing proved fortuitous. Just as Murakami resigned with vague plans to travel the world with his new wife, a college friend called with an opportunity. The friend had been traveling across Asia monthly, building a network of clients, when he reached a conclusion: India would be the next big market.
“He just called me. Something’s going on in India and I feel India will be the next big thing,” Murakami remembers. “He asked me why don’t you join. It was perfect timing. I just quit Nomura and I was thinking about traveling around the world, so it might be interesting to go to India and start something new together.”
The Laboratory of Failure
What followed was Murakami’s education in Indian market dynamics through the lens of a failing startup. Granma India, the service marketplace he co-founded in Delhi, resembled what would later become Urban Company. The business model worked - they became profitable connecting professionals with customers for home services.
But profitability without scale meant nothing in India’s winner-take-all market dynamics.
“We actually became profitable and also running good, but at the same time, competitors came into the market. 2014, 2015, as you may know, it’s obviously one of the first wave of the startup bubble. Most of the competitors were raising big amounts of money at the seed stage, using all the money for marketing, discounting.”
The lesson was harsh but invaluable: being profitable but small loses to being funded and scaling. This insight would later inform his investment philosophy - in competitive markets like India, founder quality matters more than initial business model, because strong founders can adapt while mediocre ones cannot.
After two years, Murakami and his partner faced a choice: raise money to compete or shut down. They chose a third option when destiny intervened in that Tokyo izakaya.
The 2,500-Meeting Strategy
Starting Incubate Fund India with just $3 million required building credibility from zero. Murakami’s approach was characteristically methodical: meet everyone, understand everything, build reputation through systematic relationship building.
“For six months actually, for the first one year, I have been meeting with technically everyone who contacted me. And also I was trying to meet as many people in the industry as possible, including founders, investors, even lawyers, accountants, anyone in the ecosystem.”
The numbers were staggering: over 2,500 people met in person during that first year. This wasn’t networking - it was market research at scale. Murakami was calibrating his understanding of founder quality, investor expectations, and ecosystem dynamics.
The systematic approach paid dividends when those early relationships evolved into deal flow, market intelligence, and the reputation that preceded him: “Some people started helping me, saying okay, some random crazy Japanese is doing something crazy, and then okay, I’m happy to support you.”
The First Investment Crisis
But relationship building alone couldn’t guarantee investment success. For six months, Murakami brought 30-40 deals to Incubate Fund’s investment committee in Japan, watching each one get rejected. The psychological pressure mounted.
“I couldn’t pass any deal for six months. I think I brought maybe 30-40 deals into the IC, but we couldn’t pass the deal at IC. So I was feeling like, okay, six months, I couldn’t pass any deals at IC. So am I a good investor or not?”
The high bar existed for good reason - first investments in new regions set precedents for entire funds. When ShopKirana, a B2B supply chain startup serving kiranas, finally passed the committee, it validated both Murakami’s judgment and the India thesis. ShopKirana went on to secure follow-on funding from Info Edge and others, demonstrating the quality assessment had been correct.
The Japan-India Investment Philosophy
Murakami’s breakthrough insight centered on recognizing fundamental differences between Japanese and Indian startup ecosystems, then creating hybrid approaches that captured the best of both.
Japanese founders and investors prioritize profitability from day one, partly because Japan’s IPO market accepts companies at modest valuations - even $100 million companies can go public. This creates different risk calculations and growth strategies.
“Japanese founders and the startups, even the VC ecosystem, is very much keen to make the company to be profitable and sustainable, even from day one. This is also in return of that the IPO market is very wide open for the early stage startups. So once the company becomes profitable, the IPO’s door will be open.”
Indian founders think differently, understanding that massive markets reward aggressive scaling and bold moves. The cultural contrast creates arbitrage opportunities for investors who can combine both approaches.
“Indian founders or the startups are very good at dreaming big, making very bold moves, creating big growth. On the other hand, Japanese founders focus on making the company profitable, sustainable, even from day one. We are very detailed in terms of all the numbers, especially for the cost side.”
The optimal approach combines Japanese discipline around unit economics with Indian ambition for market capture. This hybrid philosophy proved particularly valuable during funding winters, when portfolio companies already had sustainable business models built into their DNA.
The Captain Fresh Transformation
The power of Murakami’s founder-first philosophy became clear through Captain Fresh, where Incubate Fund Asia wrote the first venture capital check. Founded by Utham Gowda in 2020, the company initially focused on India’s domestic seafood supply chain.
What Murakami recognized wasn’t the business model - it was founder quality that could enable strategic pivots.
“Even Captain Fresh, when we invested, I cannot say zero vision, but almost zero vision about the global expansion. When we invested, they are very much domestic company. They are trying to build this seafood supply chain in India only. But now 90% of the revenues are coming from outside.”
The transformation was dramatic. Captain Fresh evolved from a domestic marketplace into a global seafood supply chain platform. The company’s revenue reached ₹1,395 crore in FY24, representing 71% year-over-year growth. Losses narrowed by 22% to ₹229 crore as the business achieved greater scale efficiency.
More than 60% of revenue now comes from the United States, with expansion across Europe and the UAE. The asset-light marketplace model proved particularly effective in the traditionally fragmented seafood industry, where technology could create transparency and efficiency.
In August 2025, Captain Fresh filed its draft red herring prospectus with SEBI, seeking to raise $350-400 million through its IPO. The filing represents validation of both the company’s global expansion strategy and Murakami’s thesis about Indian startups’ international potential. With total funding exceeding $226 million and a current valuation of approximately $541 million, Captain Fresh exemplifies how strong founders can transform business models entirely.
The Yulu Evolution
The founder quality framework proved equally prescient with Yulu, where Incubate Fund Asia again wrote the first venture capital check. When Murakami invested, there was no electric vehicle concept - the company focused on bicycle sharing.
“When we invested in Yulu, there’s no EV concept in Yulu. They are doing the bicycle sharing. And then after six, seven months, they changed completely into the EV.”
The pivot proved transformative. Yulu evolved into India’s leading shared electric vehicle platform, operating 45,000 EVs across 11 cities including Bengaluru, Mumbai, Delhi, and Hyderabad. The company achieved EBITDA positivity and reached $30 million in annual recurring revenue, with users traveling more than 850 million kilometers while saving 32 million kilograms of CO2 emissions.
Strategic partnerships with Bajaj Auto and Magna International provide both capital and operational expertise. The collaboration with Magna created Yuma Energy, a battery-as-a-service business that processes over one million battery swaps monthly - solving one of shared mobility’s biggest operational challenges.
Yulu’s business model targets two distinct segments: individual mobility through pay-per-minute rentals averaging 20-25 minutes, and last-mile delivery through daily or weekly plans starting at ₹160 per day. The dual approach provides revenue diversification and captures value from India’s booming quick commerce sector.
The company plans an IPO within 2-3 years, targeting deployment of 100,000 EVs by 2025 supported by a $100 million Series C funding round. Like Captain Fresh, Yulu represents validation of Murakami’s core insight: exceptional founders can pivot business models entirely, but founder quality cannot be upgraded post-investment.
The Corporate LP Strategy
Murakami’s success stems partly from his limited partner strategy, which prioritizes strategic value creation over pure financial returns. For the first two funds, 90% of LPs were Japanese corporates seeking India market access rather than traditional venture returns.
“The majority of our LPs for our fund one and fund two were corporates. Japanese corporates who want to do something in India, who want to collaborate with Indian startups, and some family offices who have interest in Indian market.”
This patient capital structure creates competitive advantages. Corporate LPs provide portfolio companies with potential customers, distribution channels, and operational expertise. The model’s effectiveness shows in the numbers: 40% of portfolio companies received subsequent funding from LPs, while several started direct business collaborations.
“For fund one, fund two portfolios, I think 40 percent of the portfolios actually receive the subsequent funding from our LPs actually. So this is very strong interest from the LP side and then actually some companies actually started the business together also.”
The corporate LP approach proved particularly prescient as Japanese interest in Indian markets surged. Media coverage of Indian startups in Japan increased dramatically over the past year, with major corporations actively seeking partnership opportunities.
“Every single day, all the major media in Japan is talking about the Indian economy, Indian startups,” Murakami notes. “The number of contacts reaching out to me from Japanese media has suddenly increased. Now many corporates, many investors are looking at Indian startups for investment and collaboration.”
Fund Evolution and Scale
The systematic approach enabled remarkable fund evolution. Starting with a $3 million proof-of-concept vehicle in 2016, Incubate Fund Asia grew to a $20 million second fund, then a $30 million third fund closed in 2024. The progression demonstrates how early wins create credibility for larger capital commitments.
The fund structure also evolved. While early funds comprised 90% Japanese corporates, the third fund attracted investors from Singapore, South Korea, and other regions. The diversification reflects both fund success and recognition of India’s investment potential.
The most significant development came through partnership with SMBC, one of Japan’s largest financial institutions, creating the $200 million SMBC Asia Rising Fund targeting growth-stage fintech companies. The collaboration combines Incubate Fund Asia’s deal sourcing and evaluation expertise with SMBC’s capital and operational resources.
“Last year we launched 200 million fintech growth stage focus fund together with SMBC,” Murakami explains. “For seed fund, sector agnostic seed fund, we have three funds now currently active. And then for the growth stage fintech, we together with SMBC, we are running the 200 million dollar fund.”
The partnership creates synergies across portfolio companies. Successful seed investments can access growth capital from the SMBC fund, while both funds benefit from collaboration opportunities with SMBC’s banking operations across Asia.
Market Context and Contrarian Success
The broader market context makes these successes more remarkable. Asian venture capital funding crashed to $65.8 billion in 2024, the lowest level since 2014. Late-stage funding was particularly impacted, falling 47% in the fourth quarter alone as geopolitical tensions and economic uncertainty weighed on investor sentiment.
Yet India bucked regional trends, with venture funding increasing 40% to $13.7 billion as domestic fundamentals and regulatory reforms strengthened investor confidence. The contrast highlights the importance of market selection and local expertise in cross-border investing.
The B2B supply chain sector, where Incubate Fund Asia has multiple investments including Captain Fresh and ShopKirana, experienced particularly strong growth. Funding in the sector increased 216% in 2025 compared to 2024, reaching $731 million across 34 rounds. The sector comprises 2,380 companies in India, with 378 funded companies having collectively raised $10 billion and produced eight unicorns.
This sectoral strength aligns with Murakami’s evolved investment thesis. While Incubate Fund Asia remains sector-agnostic, the firm developed expertise in areas showing consistent success: B2B supply chain, fintech, mobility, and increasingly, deep tech and green tech for the third fund.
The Founder Quality Framework
Murakami’s most important insight centers on founder quality assessment in competitive markets. The framework evolved from painful early lessons about why promising companies failed to secure follow-on funding.
“In India, especially for the seed fund, founder quality is everything. This is especially important in India, even compared to Japan. The reason is India, obviously, a large market, more entrepreneurs. And it means like if there’s good opportunities, maybe 10 other companies or founders are doing very similar things in the market.”
The competitive dynamics create existential pressure around Series A funding. Companies that don’t secure investment from top-tier funds face dramatically reduced success probabilities, making founder quality assessment critical at the seed stage.
The evaluation process includes 20-30 checkpoints covering education, work experience, execution track record, and reference checks from the ecosystem. All team members must agree on founder quality before bringing investments to the committee.
“We check founders’ pedigree, which college they got educated, what kind of grades they have. And then also the working experience, especially with B2B companies, he should have very strong working experience in the relevant field. And also some execution experience we want.”
The framework difference from Japan is profound. In Japan’s less competitive market, above-average founders with good business models can achieve mid-sized IPOs. In India, business models can change entirely, but founder quality cannot be upgraded post-investment.
“In Japan, if there’s good opportunities and even above average founders starting something in a good market with good business models, maybe they will get one or two competitors only, and then they can go for mid-sized IPO in a few years’ time horizon. But in India, if the founding group is very strong enough, the business model can change in the future. But this founder quality, we cannot replace the CEO at the seed stage.”
Current Moment and Future Vision
As 2025 unfolds, Murakami’s methodical approach appears increasingly prescient. While broader markets face continued headwinds, his portfolio companies are reaching inflection points that validate the cross-cultural investment thesis.
The timing for this approach looks favorable. India’s startup ecosystem has matured significantly, with IPO exit values surging 7x in 2024 as companies like Zomato demonstrated sustainable public market performance. Policy reforms eliminating angel tax and reducing capital gains tax rates have improved the investment climate.
The fund’s geographic expansion into Southeast Asia, particularly Indonesia, applies the India playbook to new markets. The team has grown from Murakami working alone to seven people across multiple countries, with partner Rajiv Ranka leading day-to-day Indian operations while Murakami focuses on fund strategy and LP relationships.
“India now is one of the most brightest moment for Indian founders. The Indian economy is growing and stable. And also all the global investors are looking at India. So it’s the right time to start something new if you have something interesting.”
The corporate LP strategy continues evolving as Japanese companies increase India focus. The bridge between mature Japanese capital and emerging Indian innovation creates value for all stakeholders - founders access patient capital and operational expertise, corporates gain market access and partnership opportunities, while investors benefit from strategic value creation beyond financial returns.
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