A Summer of Startup Events!
Startup enthusiasts, mark your calendars! Japan’s event lineup this summer is set up to be hotter than a sweltering heat wave in Tokyo.
The last few years have seen a wave of startup conferences pop up in Japan - some extensions of older events interrupted by the pandemic and others aiming to bring something new to the scene.
Here are a few to watch:
Takeoff Tokyo - 4/10~11
TEAMZ WEB3 / AI SUMMIT 2024 - 4/13-14
SusHi Tech Tokyo 2024 - 5/15-16
Climbers Startup JAPAN 2024 - 5/15-16
IVS 2024 Kyoto - 7/4-6
Growth Industry Conference - 11/12-14
The Headlines
Japan’s graduates are moving more towards startups
Top 20 Funded Startups for March 2024
U.S. pulls further ahead of China as Japan's investment destination
Japanese automakers' U.S. sales up 15% in Q1, led by hybrids
Deep Dives
Japan’s graduates are moving more toward startups
Younger generations in Japan are demonstrating an increasing interest in startups in a shift away from Japan’s traditional salaryman-driven corporate culture. This change is underscored by Japan's significant presence in the FT's 500 high-growth companies in Asia-Pacific, reflecting a dynamic shift towards innovation and entrepreneurship, especially among younger generations.
Japan's startup scene is challenging the traditional image of the Japanese salaryman, with companies like KabuK, Torana, and Chat Plus showcasing significant growth and innovation.
Younger generations in Japan are showing an increased interest in startups, driven by a shift in societal values that now favor financial independence and entrepreneurial challenges over traditional corporate careers.
101 Japanese companies were ranked in FT’s list of 500 high-growth companies in APAC based on revenue growth from 2019-22 - a notable showing compared to past years.
According to data provider Preqin, Japan was the only country in Asia-Pacific where the number of venture capital deals rose last year compared with the year before.
Top 20 Startup Funding Rankings for March 2024
EmulationCreative, Inc.'s information platform - Uniqorns - has released a comprehensive overview of Japanese startup funding in March 2024. We’ve translated the top 10 with details on the top 5!
Business: Operation of "GO" cab app
Funding amount: 8 billion yen
Investors: Bank of Mitsubishi UFJ, Sumitomo Mitsui Trust Bank, Mizuho Bank, Sumitomo Mitsui Banking Corporation, Aozora Bank
2. TIER IV
Business: Development of automated driving systems in the area of route buses
Funding amount: 6 billion yen
Investor: Isuzu Motors Limited
Business: Planning and production of a wide range of entertainment content, including video, music, publications, and merchandise
Funding amount: 4.8 billion yen
Investor: SMBCCP Investment Limited Partnership 1
Business: Wholesale of electric power
Funding amount: 3.6 billion yen
Investors: Mitsubishi UFJ Bank, Aozora Bank, Aichi Bank
Business: Provides influencer marketing platform through AI analysis
Funding amount: 3.1 billion yen
Investor: China Telecom
U.S. pulls further ahead of China as Japan's investment destination
Japanese companies are redirecting their investment focus towards the United States, leveraging sectors like housing and food to capitalize on American consumer spending, while concurrently scaling back their investments in China. This strategic shift, aligning with U.S.-Japan cooperation on critical technologies and highlighted by recent high-profile acquisitions, signals a significant realignment of Japanese corporate priorities towards the lucrative U.S. market.
In 2023, Japanese direct investment flows into the U.S. maintained a high level of $63.5 billion, with the total investment stock reaching $696.5 billion, showcasing a strategic pivot towards the U.S. over China.
High-profile acquisitions in the housing sector, such as Sekisui House's purchase of MDC Holdings and Daiwa House Industry's acquisition of The Jones Company of Tennessee, highlight the focus on the American residential market.
Japanese firms are also expanding their footprint in the U.S. food industry, with Nissin Foods Holdings and Yakult Honsha planning new manufacturing facilities in South Carolina and Georgia, respectively, to cater to American consumers.
Despite the appeal of the U.S. market, Japanese companies face challenges, including lower returns on investment compared to other regions and potential political risks, as seen in opposition to Nippon Steel's acquisition of U.S. Steel, illustrating the complex dynamics of foreign investment in the U.S. economy.
Japanese automakers hit the gas in Q1, with U.S. sales surging 15% on the back of strong hybrid demand
Buoyed by strong hybrid demand, sales of new cars from 6 major Japanese automakers jumped 15% in the U.S. for Q1 (around 1.43 million vehicles sold). This comes despite a slowdown in electric vehicle sales
This builds on their four straight quarters of double-digit gains. Analysts point to hybrids' fuel efficiency and convenience as driving factors.
Electrified vehicles surged in popularity during Q1, with their share of total sales jumping to 36.6%, compared to just 25.3% in the same period last year.
Meanwhile, U.S. auto giant GM's sales dipped slightly in Q1, totaling 594,233 vehicles – a 1.5% decrease compared to last year.
Word on the Street
Fundraising Highlights
MTU, a medical security support service, raised a ¥450M JPY (~$2.9M USD) Series A round from the 90s1 Investment, D4V2, and the Iceblue Fund
Blue Planet Works, provider of “App Guard” a security tool that prevents endpoints from being compromised by advanced cyber attacks, raised an undisclosed Series D round from the Japan Hospital Mutual Aid Association
Elestyle, developers of "elepay", a multi-payment platform that promotes cashless payments, raised a ¥1B JPY (~$6.5M USD) Series B round from the SAI Global Japan Fund I, and Mitsui Sumitomo Bank
Folio, a service that allows anyone to easily manage their personal assets, raised a ¥1B JPY (~$6.5M USD) Series E round from Okasan Capital Partners
Sanu, a service that allows anyone to easily manage their personal assets, raised a ¥7B JPY (~$46.1M USD) Series A round from SDF Capital, Siiibo Securities, Mizuho Bank, Resona Bank, and Shoko Chukin Bank
Infcurion, a digital wallet service that provides smartphone payment, remittance, and coupon functions linked to bank accounts, raised a ¥1.9B JPY (~$12.5M USD) Series C round from JR West Innovations, QR Investment, S Ventures, Hokkoku Financial Holdings, Japan Finance Corporation, Shizuoka Capital, and Shizuoka Bank
Pictoria, a startup that operates the world's first AITuber office "AI CAST", raised a ¥199M JPY (~$1.31M USD) Series A round from the Sony Innovation Fund
More Food for Thought
Some additional reads from the week -
Why ‘Japaneseness’ is holding Japan’s startups back from going global (Tech in Asia)
Space startup Astroscale explores Tokyo listing by June (Tech in Asia)
The Changing Asian Landscape: Japan Enters a New Era (Neuberger Berman)
Japan To Welcome 820,000 Foreigners (Travel and Leisure)
Record 63% of Japanese in financial stress, poll shows (Kyodo News)
U.S. Steel union rejects Nippon Steel's appeal for takeover support (Nikkei)
U.S. seeks to 'integrate' Japan into defense industrial base (Nikkei)
Notes from the Team
Thanks for reading and hope to see you around the sidewalks of Tokyo!
Have a question or any feedback? Let us know!
Jeremy (Investor @ GHOVC) / Kenneth (Product @ Moon Creative Lab)
One more big event that I missed - CIC's Rocket Pitch Night on 5/13.
Here's the link!
https://rocket-pitch-night-spring-2024.peatix.com/