(Bloomberg) -- Billionaire Peter Thiel’s Founders Fund is backing a new $130 million vehicle by Coral Capital to invest in Japan’s technology startups as the country shakes off its image as a tough place for entrepreneurs.

Coral Capital’s third fund will focus on early-stage financing from seed to Series A, founding partner and Chief Executive Officer James Riney said in an interview. Initial round investments will range between 30 million yen and 500 million yen ($270,000 to $4.5 million) and up to 5 billion yen for follow-up checks.

More than 30% of the money comes from overseas investors such as Founders Fund and Singapore’s Pavilion Capital, Riney said. Domestic investors include Mizuho Bank Ltd., Mitsubishi Estate Co., Shinsei Bank Ltd., Dai-ichi Life Holdings Inc., and Gree Inc.

Japan has come a long way from the time when would-be entrepreneurs needed an equivalent of $100,000 in capital just to register a company. Startups in the country raised $4.76 billion last year, just short of the 2019 record and more than double the amount five years prior, according to Tokyo-based Initial.

Overseas venture capital firms such as Sequoia Capital, Airbus Ventures and Light Street Capital have also taken notice, investing in the latest crop of unicorns, venture companies worth more than $1 billion.

“Japan is a very overlooked market and has been for a long time,” Riney said. “Now, because you have more capital available, you are seeing companies forgoing the IPO, raising larger rounds and going for larger exits.”

Riney, 32, opened his first Japan fund in 2016 in partnership with Silicon Valley’s 500 Startups, raising 3.8 billion yen. That same team then launched Coral Capital in 2019. The second fund raised 6 billion yen from many of the same limited partners, including Taizo Son, one of Japan’s best-known seed investors and the younger brother of Masayoshi Son.

Coral Capital’s investment strategy has been to focus on either hyper-local companies, businesses that take advantage of Japan-specific cultural or regulatory differences, or startups with proprietary technologies that can scale globally, Riney said. Its portfolio across the two funds totals more than 80 ventures, including automation service SmartHR Inc., one of the latest Japanese startups to reach unicorn status.

“Historically, when you wanted to raise $20 million plus in Japan, you didn’t have that many options,” Riney said. “So what would happen is that you would have these companies go public quite early and then cross the $1 billion mark.”

That’s one of the reasons the country still lags far behind its Asian neighbors and the U.S. when it comes to creating major private startups. There are nearly 800 so-called unicorns in the world, according to CB Insights, with about 400 in the U.S., more than 150 in China and about 40 in India. Only six made the list from Japan, the world’s third-largest economy, the same number as from Hong Kong.