TDK announces to establish corporate venture capital fund
May 19, 2023
TDK Corporation (TSE:6762, hereinafter “TDK”) hereby announces to establish a corporate venture capital fund (Fund EX1, L.P. “CVC Fund”) in the US focusing on investing in EX (Energy Transformation) related startups contributing to decarbonization based on the resolution of Board of Directors on May 19, 2023. The CVC Fund will be invested by TDK Ventures Inc. (California state in U.S.A., hereinafter “TDK Ventures”), which is a consolidated subsidiary operating corporate venture capital (hereinafter “CVC”) activities, and Amperex Technology Limited (Hong Kong, China, hereinafter “ATL”), which is a consolidated subsidiary operating manufacturing and selling rechargeable batteries.
1. Reason for the establishment
TDK has operated the business of electronic components based on the magnetic material technologies and also recently cultivated the new business opportunities related to EX (Energy Transformation) and DX (Digital Transformation) to pursue the sustainable enhancement of enterprise value. Particularly, rechargeable battery business is one of the core businesses of TDK, which has been expanded under the leadership of ATL. It focuses on further strengthening of the competitiveness of small capacity battery business. For medium-capacity battery business such as residential ESS, ATL has been developed speedily and efficiently based on “Business Alliance and Establishment of Joint Venture with Contemporary Amperex Technology Co., Limited (disclosed on April 28, 2021).
In such a business situation, TDK decided to establish an US-based CVC Fund to develop innovative ecosystem towards the further growth of our business related to EX through investment into startups contributing to decarbonization and alliance with them.
TDK has already established TDK Ventures Inc. operating CVC activities in May 2019 for the purpose of investment into startups at early stage to accelerate technology development and bolster our growth strategy. It has invested into 29 startups in total since its commencement and built investment portfolio for the future business growth. The experiences and knowledges will be leveraged for the operation of CVC Fund after its establishment.
2. Outline of CVC Fund
| (1) | Name | Fund EX1, L.P. | |
| (2) | Location | Delaware, U.S.A. | |
| (3) | Governing law | Limited Partnership based on the laws of the states of Delaware, U.S.A. | |
| (4) | Objectives | Investment into startups contributing mainly located in the U.S. and Europe to decarbonization to create new business and develop new technologies | |
| (5) | Launch date | June 2023 (Planned) | |
| (6) | Total investment amount | Up to US$ 150 million until May 2028 as the final year of CVC Fund operation * | |
| (7) | Investors and investment ratio | TDK Ventures Inc. : 67% (Limited partner)
ATL : 33% (Limited partner) |
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| (8) | Investment period | For 5 years from June 2023 (Planned) | |
| (9) | Summary of general partner | Name | Top Level GP, LLC |
| Location | Delaware in USA | ||
| Representative | Nicolas Sauvage (TDK Ventures Inc. President) |
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| Investment amount | US$ 20,000 | ||
| (10) | Relationship between the listed company (TDK Corporation) and the CVC Fund | Capital relationship | TDK will be an investor of the general partner (Top Level GP, LLC) of the CVC Fund |
| Personnel relationship | Not applicable | ||
| Business relationship | Not applicable | ||
*The CVC Fund might become a “Specified Subsidiary” of TDK since the invested amount into the CVC Fund would be 10% or more of share capital of TDK after its establishment (June 2023 onward).
3. Outline of limited partners as consolidated subsidiaries
| (1) | Name | TDK Ventures Inc. |
| (2) | Location | San Jose in California, U.S.A. |
| (3) | Representative | Nicolas Sauvage (President) |
| (4) | Principal business | Exploration and investment into startups operating in the markets of material science, energy/power and related areas |
| (5) | Capital | US$ 1 |
| (6) | Date of establishment | May 1, 2019 |
| (7) | Equity ratio | TDK : 100% (as of the end of March in 2023) |
| (1) | Name | Amperex Technology Limited |
| (2) | Location | Hong Kong Special Administrative Region of China |
| (3) | Representative | Fumio Sashida (Chairman) |
| (4) | Principal business | Development, manufacturing and sales of lithium-ion rechargeable batteries |
| (5) | Capital | US$ 267,588,100 |
| (6) | Date of establishment | June 11, 1999 |
| (7) | Equity ratio | TDK : 100% (as of the end of March in 2023) |
4. Outlook
The impact of the establishment of the CVC Fund on the financial results for the fiscal year ending March 31, 2024, will be negligible.
(Reference) TDK’s Consolidated Forecasts for the Fiscal Year Ending March 31, 2024 (announced April 28, 2023) and Results for the Previous Fiscal Year
| (Yen millions) | Net sales | Operating profit | Profit before tax | Net profit attributable to owners of parent |
|---|---|---|---|---|
| Forecasts for the year ending March 2024 | 2,020,000 | 190,000 | 188,000 | 147,000 |
| Results for the year ended March 2023 | 2,180,817 | 168,827 | 167,219 | 114,187 |
Contacts for media
| Region | Contact | Phone | ||
|---|---|---|---|---|
| Japan | Mr. Yoichi OSUGA | TDK Corporation Tokyo, Japan |
+813 6778-1055 | TDK.PR@tdk.com |
