Unearthing Japan’s hidden jewels

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In the 1990s, when a young Masayoshi Son was pursuing acquisitions in his home country, he sought advice from a banker eight years his junior called Hiroshi Mikitani.

Over the years, both men have blazed past a stifling corporate hierarchy to found two of Japan’s sprawling tech conglomerates – SoftBank and Rakuten. (Fun fact: Mikitani said in an interview that he did not even know the word “entrepreneur” when he enrolled at Harvard.)

Even Son, who has long been skeptical of Japanese companies, took stakes in Japanese startups for the first time in 2021 through his Vision Fund. He’s also looking to ramp up investments in the region.

In Japan’s burgeoning startup scene, we look at some of the country’s most prominent startups that have raised the most capital from investors over the past two years.

Today we look at:

• Japanese startups that have made the most impact in the region
• A Web3 firm giving out grants worth US$2 million
• Other newsy highlights such as an investment platform that allows users to invest as little as US$1 in companies like Tesla, Apple, and Netflix, and Singapore’s new rules for crypto firms.

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Hunting for Japan’s hidden jewels

Image credit: Timmy Loen

Overseas investors are increasingly backing Japanese startups as the country starts to shake off its reputation as a land without unicorns.

Startups in Japan raised over US$3 billion in the first six months of 2021 alone, triple the amount in the same period five years earlier, according to data tracker Initial. While Japan could claim only one startup valued at US$1 billion in 2016, it’s now home to six, including the likes of Carlyle Group-backed synthetic biomaterials firm Spiber and AI developer Preferred Networks.

• The unicorn miss: The issue in Japan has not necessarily been about the number of young companies reaching billion-dollar status. The issue is that many of them went public before becoming unicorns. Since they were already public by the time they reached that size, they were no longer technically unicorns. In fact, people no longer even consider them startups.

• An IPO rethink: Despite being on track for a record year of funding – driven by firms like Kakao, Paidy, and Spiber – Japan’s funds raised remain just a fraction of the US$288 billion global tally in the first half of 2021. Japan Prime Minister Fumio Kishida has called for a shake-up of the initial public offering process to better serve startups. The new system aims to favor IPO investors over a startup founder’s ability to secure funding.

Golden ticket to Web3

Quick bytes