Earlier this month, the Cool Japan Fund announced an investment of JPY5.5 billion ($50 million) into Gojek, a large tech startup in Indonesia. Gojek simultaneously confirmed its expansion from ride hailing and food delivery into streaming video.
Cool Japan says it will work with Gojek to spread Japanese culture in Indonesia through both the platform’s food delivery and video streaming services.
The move follows the latest revelations that the fund is continuing to lose money. That development is increasingly garnering attention about how public money is used.
“[This investment in Gojek] was decided under very strict screening,” said Naoki Kitagawa, a former representative director of Sony Music Entertainment (Japan), who became president and CEO of Cool Japan in June last year.
Formally launched in November, 2013, CJF Inc. is a company funded by both public and private sectors, with the aim of promoting Japanese exports, such as anime and food.
Thus far, the results have been dismal. For the fiscal year ending in March, the fund reported losses of $160 million (JPY17.9 billion). The year before, the fund was $90 million (JPY9.8 billion) in the red.
Critics say that the public-private funding structure allows for a lack of accountability regarding performance.
Last year, Takayuki Shimizu, a member of the House of Councillors from the Japan Innovation Party, raised the matter in the Diet. “[The Cool Japan Fund] is allowing projects to move forward unchecked without releasing to the public its profits and losses for current projects,” Shimizu said.
As reported by Fuji News Network, among the failures was an investment of $9 million (JPY970 million) in a department store in Kuala Lumpur in 2016. CJF sold its shares in the venture two years later at a presumed loss, but the amount has not been disclosed.
Cool Japan has been a regular investor in entertainment, and funding Gojek’s move into media was not Cool Japan’s first investment in streaming.
In April this year, it announced that it was co-investing alongside talent agency Yoshimoto Kogyo and telecoms giant NTT into Laugh & Peace_Mother, a business for distribution of educational content. Previously, Cool Japan was a backer of the Daisuke animation website, which became wholly owned by games company Bandai Namco in 2017, following a buyout.
In August 2018, Cool Japan announced that it would put up to $47 million (JPY5.15 billion) into another fund, Japan Contents Factory Investment Business, to support the creation of Japanese visual content aimed at international distribution. Other partners are NTT Plala, YD Creation, Bungeishunju, and supermarkets to multiplex giant Aeon Entertainment. The Japan Contents Fund helps companies bankroll presales contracts (“provides capital until payment of license fees and supports production companies for visual content within a contract that promises payment after completion with Video On Demand (VOD) media services etc.”)
Cool Japan has also announced investments in a fashion brand for working women, and a direct to consumer winery promoting consumption of sake by U.S. consumers. “I want to convey the best Japan has to offer,” Kitagawa said.