Paper short abstract:

The paper examines the entry of a Japanese sōgō shōsha into the Estonian venture capital market. Document analysis and interviews are used to understand motives behind market entry, investments and cooperation with "New Nordics" in the specific case of ITOCHU and Tera Ventures.

Paper long abstract:

The paper is driven by the booming start-up ecosystem in Estonia and rising number of Japanese investments to the so-called New Nordics during the last years. Specifically, the paper analyses the entry of the Japanese general trading company (sōgō shōsha) ITOCHU into the Estonian venture capital market. The theoretical part of the work contributes to the existing literature by pointing out the strategic differences between sōgō shōsha 's entry into the foreign market compared to ordinary multinationals. Special attention is paid to the cultural characteristics of the investment targets of sōgō shōsha and Japan. The internationalisation experience of ITOCHU as a traditional Japanese sōgō shōsha is analysed. A case study is carried out in the empirical part of the work. It will be built on the parallel approach of the ITOCHU, and it’s Estonia-based investment target Tera Ventures, a seed investment company. The case study is based on document analysis and interviews with the managers and decision makers of both firms. During the interviews, the expectations of the parties before the start of the cooperation, the process of starting the cooperation and the setbacks that occurred during it will be figured out. The future course of the cooperation and the prospects and assessment so far will also be clarified. Based on the case studies, recommendations will be given, on how to create long-lasting collaboration between Japanese and European firms.