3 big ways in which the Japanese startup ecosystem is changing

Doing business in Japan has long been associated with overinflated zaibatsu (large Japanese business conglomerate), domestic insularity and a widespread aversion to any kind of investment risk. Small wonder then, that the Japanese startup ecosystem is regarded as much less healthy than its counterparts in the US, Europe and South Korea. The numbers don’t lie: Japanese investment in venture capital (VC) firms was only about US$960 million in 2014, compared with US$48 billion in the US.

At long last, however, this state of affairs appears to be changing. Ahead of Tech in Asia Tokyo 2017 on September 27-28, we bring you three reasons to reconsider your less-than-sanguine outlook on the Japanese startup ecosystem.

n1. Funding and deal sizes for startups are on the rise, big-timen

In absolute terms, the availability of VC funding for startups in Japan still lags far behind other countries’. But there is light at the end of the tunnel. The first six months of 2016 alone saw Japanese startups raise a combined US$897 million of capital, a 21 percent increase from the corresponding period in 2015.

The median deal size for Japanese startups also more than doubled within the space of a single year, from US$540,000 in 2014 to US$1.13 million in 2015. Barring a cataclysmic economic disaster, one can only expect these numbers to increase because…

n2. The big guys are thirsty for new bloodn

In the second quarter of 2015, Japanese corporations were involved in 80 percent of all VC deals, compared to only 24 percent for their US counterparts. There’s no denying that corporate VCs are a big deal in Japan, and more corporations are now looking to step up their investments or get in on the act for the first time. Hot new technologies such as AI and IoT are drawing interest from across the board, with the likes of Toyota, Nomura Holdings, Mitsui Group and NTT Docomo all setting up CVC outfits within the last two years. A shift towards an open innovation model has also seen some of these mega-corporations go on acquisition sprees in a bid to lay hands on the latest cutting-edge innovations.

n3. Industry deregulation galoren

It used to be that any gaijin (foreigner) setting up a business in Japan would have to jump through a long series of bureaucratic hoops just to get up and running. Well, no longer. In Tokyo at least, the Metropolitan Government has implemented numerous measures to ease the process. These include an interim business manager visa to give entrepreneurs more time to get their paperwork settled, a One-Stop Business Establishment Center which combines all relevant bureaucratic departments under one roof, and the establishment of five Special Zones for Asian Headquarters with attractive tax incentives and subsidies. Tokyo Governor Yuriko Koike has even pledged to put the necessary infrastructure in place for expatriate families in areas such as education and healthcare.

nImmerse in Japan’s local startup scenen

If you’re considerably intrigued by this remarkable turn of events, you might want to traipse down and see it for yourself. Join us for Tech in Asia Tokyo 2017 on September 27 & 28, where your favourite staples such as Bootstrap Alley and Arena Pitch Battle return alongside an exciting format revamp! You can even take some time out to explore Tokyo’s unique mix of heritage and modernity.

If you’re going solo, purchase your conference pass now and you’ll be entitled to a 25 percent discount off the cover price till 7 July, 2359 hrs (GMT +9). Simply key in the promo code ‘tiatokyo25’ with your purchase!

nSave more with this unbeatable deal!n

Alternatively, you can grab a colleague or friend to enjoy a special 1-for-1 promotion at this signup page. This unbeatable offer – available only if you sign up by 30 June – effectively guarantees you a whopping 50 percent discount your ticket!