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Startup deals hit record in Japan before listing curbs
Startup buyouts in Japan reached a record high in 2024 as anticipation of new Tokyo Stock Exchange rules and regulatory pressure prompted founders to sell instead of pursuing public listings.
Regulators have said companies on the exchange’s Growth Market must reach a market value of at least 10 billion yen (US$66 million) within five years of listing, starting in 2030.
More than 60% of about 600 firms on the Growth Market currently fall below that threshold.
Market research firm For Startups reported 199 startup acquisitions in 2024, more than twice the number in 2020, while IPOs dropped to 21 in the first half of 2025.
Investors and founders said the shift is making mergers and acquisitions more common, with some citing hopes for larger, globally competitive startups.
International investors, including Goldman Sachs and KKR, have taken part in recent major funding rounds for Japanese startups.
🔗 Source: Bloomberg
🧠 Food for thought
Implications, context, and why it matters.
Growth Market delisting plan may force companies to merge before 2030 start
- The Tokyo Stock Exchange (TSE) plans to drop firms that miss a ¥10 billion market cap within five years of listing starting in 2030. Over 60% of Growth Market companies, the TSE market for young firms, sit below that line 1.
- Many founders are selling now to avoid missing the bar later. Buyouts reached 199 deals in 2024, more than double four years earlier 1.
- Japan makes buyers amortize goodwill (the premium paid above the fair value of a company’s net assets) for up to 20 years, which raises deal costs 1. Mitsubishi UFJ Financial Group cleared at least three fintech deals worth well over $1 billion in the last three years, and Mizuho Financial Group moved to take control of Upsider Holdings for about $300 million 1. That signals strategic buyers still see long-term value 1.
- Policy aims to back fewer, larger startups with “one-of-a-kind technological knowhow” that can draw global investors 1.
Private equity and corporate buyers can find openings in Japan’s consolidation wave
- Goldman Sachs led Kakehashi’s $97 million Series D at a valuation above $400 million 1. KKR co-led SmartHR’s $140 million round at over a $1 billion valuation, which signals global funds now back scalable Japanese targets 1.
- A weak yen and limited domestic capital pools may lower entry prices for dollar-based buyers 1. Rigid visa rules and banking practices can slow integration 1.
