MUFG Bank, Japan's largest bank, is doubling down on Israeli Artificial Intelligence technology, announcing on Friday a joint $80 million venture with Tel Aviv-based Liquidity Capital to help it analyze Asian startups and screen them for loans.
The new 50-50 owned joint venture, named Mars Growth Capital Pte. Ltd. will be based in Singapore. It will mainly target health care, education and e-commerce startups, screening companies' bank accounts, accounting data, and other information to determine whether to grant them financing.
MUFC bank is a subsidiary of Mitsubishi UFJ Financial Group, with Liquidity being founded in 2017 by Tel Aviv-listed investment house Meitav Dash Investments Ltd.
MUFG first invested in Liquidity Capital’s digital technology in 2019 through its corporate venture capital Mitsubishi UFJ Innovation Partners Co. Ltd.
"With MUFG’s core strategies being digital transformation and growth in its Asia Pacific franchise, it was keen to partner with Liquidity Capital again in its business development to provide advanced financial solutions to support the startups in this region," MUFC wrote in its announcement. "This agreement therefore brings to fruition these positive discussions and realizes the complementary strategic goals of both parties: the expansion of Liquidity Capital’s business and market value, and MUFG’s commitment to growth in Asia Pacific through leveraging the latest digital technology in the provision of advanced financial services."
Liquidity Capital uses a unique credit scoring model based on AI technology and real-time financial and accounting data from client bank accounts, accounting systems and CRM information captured through its API technology to forecast future earnings and cash flow.
"It is fantastic to work with visionaries like the senior executives of MUFG who immediately identified the credit revolution that is being enabled with Liquidity's forecast and underwriting technology," said Liquidity CEO, Ron Daniel. "This joint fund comes on the back of 18 months of close partnership and is the first sign of a wide scale collaboration across the world of bank credit that will completely change it over the coming years. We couldn't have asked for a more professional and experienced partner with which to continue the global expansion of Liquidity."
MUFG, headquartered in Tokyo, has a global network with over 2,700 locations in more than 50 countries. The group has over 180,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing.
“In the era of digital transformation, this partnership will enable us to become more competitive and relevant to our clients, and through the provision of innovative solutions for the startup companies we will be able to further promote financial inclusion and sustainable growth in the region,” said Masato Miyachi, chief executive of global corporate and the investment banking business unit at MUFG Bank.