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SoftBank Capital Partnership Aims to Push U.S. Startups Into Japan

NEW YORK (TheStreet) -- SoftBank Capital, the venture capital firm affiliated with Japanese telecom SoftBank, today announced a partnership and a $20 million fund investment with Yahoo! Japan to help bring early-stage U.S. tech companies to the Japanese market.

The partnership is designed to tap into Yahoo Japan's leading portal, web search and e-commerce market position and help U.S. startup companies expand into fast-growing Asian tech markets. For SoftBank Capital, the investment is expected to build international business for some of the firm's early-stage portfolio investments.

The partnership should be particularly helpful for early-stage firms with businesses tied to mobile applications, e-commerce and web advertising, according to Joe Medved, a partner at SoftBank Capital.

Medved highlights the importance of Yahoo! Japan entering the U.S. market by way of SoftBank Capital's expertise, while also noting the significance of the partnership for the firm's portfolio of companies.

"This is Yahoo Japan's first investment in the US market in its history," Medved said in an interview.

"We will want to have brought multiple companies from our portfolio to the Japan market with Yahoo! Japan," Medved said.

Already, SoftBank Capital and Yahoo! Japan have partnered in expanding one portfolio company, Criteo, into the Japanese market.

"Our partnerships with SoftBank Capital and Yahoo! JAPAN have been crucial in helping us establish our presence in Asia," Criteo CEO JB Rudelle said in a statement.

SoftBank Capital's early stage investments have included Bluefin Labs, Celtra, Moat and RebelMouse. Social analytics specialist Bluefin Labs was sold to Twitter in February.

SoftBank Capital and Yahoo! Japan's partnership shouldn't come as a surprise to many in the tech and venture capital community. SoftBank Capital was an early investor in Yahoo! (YHOO) and it partnered with the web search pioneer to form Yahoo! Japan.

Yahoo! continues to own 33% of Yahoo! Japan, while SoftBank owns 40% of the joint venture.

As recently appointed Yahoo! CEO Marissa Mayer tries to turn the company around, Yahoo! Japan remains a key asset. Speculation among Yahoo! investors often centers around whether the company will sell its stake or monetize it by way of an initial public offering.

In recent years, SoftBank has sold the bulk of its investment in Yahoo! shares. Meanwhile the firm retains a large holding in Asian e-commerce giant Alibaba, another sizeable Yahoo! joint venture.

Just as Yahoo! Japan is clamoring to get its feet on the ground in the U.S. market, so too is SoftBank.

In October, the company's founder Masayoshi Son announced a $20 billion-plus deal to buy U.S. wireless carrier Sprint (S), in a push to expand the Japanese telecom into North America.

Medved, the SoftBank Capital partner, sees the proposed Sprint deal as further evidence of SoftBank's early recognition of the opportunities of in mobility and SoftBank's early presence in the U.S.

SoftBank Capital's early-stage technology fund has invested $100 million on behalf of its parent, SoftBank, in the past few years. Recent notable investments include Buddy Media acquired by Salesforce.com (CRM), HuffingtonPost acquired by AOL (AOL) and OMGPOP, which was acquired by Zynga (ZNGA).

An interesting aspect to Wednesday's partnership is the expectation that growth in hot mobile app, e-commerce and Web ad markets goes both ways. While Yahoo! Japan wants further expertise in North America, SoftBank Capital sees significant growth opportunities in Japan.

"Japan is a significantly sized unique market that spends a lot of money in the mobile space," Medved says.

-- Written by Antoine Gara in New York

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