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Ikuo Hiraishi · · 7 min readJapanese startups haven’t gone global yet, but the ingredients are there
The last time my writing appeared on Tech in Asia, I dove into what was holding Japanese startups back from going global.
The ecosystem is still domestic – it has yet to produce a truly global startup that can follow in the footsteps of Sony or Honda and take Japanese products worldwide. But things are changing, so let’s dive into some of the positive signs that have popped up in recent years.
Tokyo by night / Photo credit: leochachaume24 / Shutterstock
Back to school
The businesses launched by Japan’s first generation of entrepreneurs, including myself, were pre-internet businesses – meaning companies that replaced analog businesses with internet-connected solutions.
Since then, with the advent of Web 2.0 and smartphones, the focus has shifted to businesses that use advanced technology.
Many startups have been successful in the domestic market, while plenty of Japan’s large companies have been slow to change.
In light of this, there has been a growing trend for talented folks from the science and engineering departments in Japan’s top universities, such as the University of Tokyo, to start tech startups rather than seek employment at large companies.
This is a chicken-and-egg relationship, and in response, various institutions have launched accelerators and funds to develop such highly educated, young technical talents.
One example is UTokyo Innovation Platform, established in 2016 by the University of Tokyo as a shareholder. It has three business pillars: investment, entrepreneurship support, and deeptech-related community development.
The platform operates an acceleration program called 1st Round, in partnership with major universities in Japan. 1st Round aims to discover and support tech talents before they receive full-scale funding from investors.
See also: Why ‘Japaneseness’ is holding Japan’s startups back from going global
In addition, SoftBank-backed DeepCore is an incubator and VC firm focusing on AI and advanced tech. The firm invests globally and operates a community of AI engineers and researchers for entrepreneurship.
Next, let’s look at university-based startups, meaning startups that are either supported by a university or based on the results of university research.
According to a report by research firm Initial, the number of university-based startups that successfully raised capital increased from 120 in 2013 to 426 in 2023. The funding raised also soared from 14.2 billion yen (US$93 million) in 2013 to 177.7 billion yen (US$1.16 billion) last year.
Events hub at last
Funding, funding, funding
Hand in glove
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The rise of startups linked to academia, a proliferation of startup events, and a surge in funding all indicate that Japan’s ecosystem is on the rise.
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