Good news for early-stage startup founders in Southeast Asia: KK Fund just completed the first close of a new fund for seed stage investments.

This second fund is larger but undisclosed, like the firm’s first, but it is notable because it comes less than two years after that inaugural fund and its LP base is another reminder of strong interest in Southeast Asia from Japan. Tokyo-listed duo Sega Sammy Holdings and ad firm Septeni Holdings invested in the fund, alongside investment group Mistletoe, and a number of undisclosed family offices and individuals from Japan, the firm said.

Singapore-based KK Fund was founded in 2014 by general partners Kuan Hsu, formerly of GREE Ventures, and Koichi Saito, formerly with IMJ Investment. It has invested in more than a dozen deals from its first fund, which Saito told TechCrunch is not fully spent. That means that, in some cases, KK Fund will make investments across both of its funds.

Saito explained that the new fund will allow KK Fund to increase its typical check size to around $400,000-$500,000 per investment. The firm is entirely focused on Southeast Asia, Hong Kong and Taiwan, and, in particular, companies within the online marketplace, logistics, fintech, and media and entertainment verticals.

Typically, KK Fund will be the lead investor in deals — indeed $500,000 is a large amount to put into a seed or pre-Series A round in this past of the world — and it is predominantly looking for companies with a product, or early release, in the market already. Saito said that they have done a couple of investments pre-product when they are impressed by the team.

There are plenty of Japanese investors as LPs within high-profile funds in Southeast Asia. Naver, the company behind newly listed Line, aligned itself with Golden Gate Ventures, while YC Capital (Yahoo Japan) invested in Monk’s Hill Ventures, but KK Fund targets a far earlier stage than those two.

So what is it about Southeast Asia that appeals to its Japanese LPs exactly?

The Japanese market is challenging for tech startups, not only due to some rigid business cultures but also the aging population and the fact that its economy is one of the planet’s most mature. Saito said that many investors are looking to green field markets like Southeast Asia, which is tipped to grow its ‘internet economy’ to $200 billion annually inside a decade, to find businesses and industries than can grow fast.

“There’s still a strong appetite for Southeast Asia,” he told me over the phone. “We started talking [to investors] in April and made our first close at the end of June. That’s quite quick, quicker than what we expected.”

“In Japan, there are a lot of regulations in terms of finance and logistics, so not many startups are active in that space,” he added of investor motivation to pursue new business opportunities. “One Japanese [LP] company wants to import business to Japan or use Southeast Asia as a test bed market, so that is an attractive part.”

KK Fund expects the final close of its second fund before the end of the year, and it has already begun investing the capital raised thus far.

The firm has also added a new face to its ranks. Singapore-based Masahiko Honma has joined as partner from Incubate Fund, a Japanese seed fund. In his native Japan, Honma previously co-founded game development company Pokelabo which was bought by GREE for $173 million in 2012. That gives him another tie to KK Fund’s founding partners.