Exclusive | Temasek-Backed Vertex Japan Invests in Digital Trading Cards Startup Heartbeats

Temasek-backed Vertex Ventures Japan has invested in Heartbeats, a Tokyo-based digital trading cards company, the latest in a series of bets aimed at turning Japanese startups into global unicorns.

The venture-capital firm aims to help its domestic startup investees win overseas clients by tapping into the global network of companies supported by Singapore state-investment firm Temasek, said Takashi Tomita, managing partner at Vertex Ventures Japan.

The Tokyo-based firm invests in startups that can benefit from Japan’s entertainment content like Heartbeats as well as companies developing semiconductor and other deep technologies, Tomita said.

Japan undoubtedly has an edge in deep technology and entertainment content, Tomita said. “What’s missing is global access,” he said in an interview.

Japan has produced far fewer unicorns than the U.S. or China. Focused on the domestic market, Japanese startups tend to stay relatively small.

The firm can arrange meetings between its startup investees and the companies that Temasek owns or invests in and advise the startups what kind of products and services are in demand, Tomita said.

“Trying to grow a startup without knowing it (demand), is like finding a needle dropped in the Pacific Ocean,” he said.

Vertex Ventures Japan is part of the global network of funds supported by Temasek-owned Vertex Holdings. Vertex funds were an early investor in Chinese company Unitree Robotics and Singapore-based ride-hailing app operator Grab, listed on Nasdaq.

Vertex’s investments in Japan are a sign of growing interest from global venture-capital firms as the government aims to improve business environments for startups.

Menlo Park, Calif.-based Andreessen Horowitz announced the opening of its Tokyo office this year, as did Manchester, N.H.-based Alumni Ventures.

Tomita said Vertex Ventures Japan plans to invest in about 20 companies through the inaugural fund of 10 billion yen, equivalent to about $64 million.

The Japan fund has recently participated in a $15 million fundraising by Heartbeats. The startup provides online platforms, where fans can trade and play with digital cards featuring baseball players, sci-fi hero Ultraman characters, sumo wrestlers and other growing lists of figures and characters.

Established in 2024, Vertex Ventures Japan has invested in eight companies, including wireless power charging startup PowerWave and semiconductor material producer Gaianixx.

As artificial intelligence advances, Tomita said demand is growing for semiconductor technology and materials. He said another area of opportunity is software and data-service startups that aim to streamline operations in industries like finance, real estate and healthcare.

Write to Kosaku Narioka at kosaku.narioka@wsj.com