Tokyo’s Dynamic Ecosystem Propels Tech Startups into Global Success

Tokyo has established itself as a preeminent hub for startup support, boasting an unrivaled network of government, corporate, and academic institutions. This collaborative ecosystem has undergone a remarkable transformation, fostering synergistic growth among venture capital firms, startups, and entrepreneurial talent, ultimately creating a dynamic and thriving environment for innovation and business development. The ecosystem produces a network of innovative tech-driven startups that reach across subsectors to bolster continued acceleration and growth. With dedicated support programs targeting globalization and scale, Tokyo is positioned to become a competitive powerhouse on the international startup stage.

Fostering a Vibrant National Startup Ecosystem

Japan is a hotbed for innovation, with the Japan Venture Capital Association (JVCA) reporting that in the last decade, VC funding across the country has increased tenfold, with increased investment from institutional investors stimulating startup growth. The surge in startups has produced science and technological advancements leveraged by skilled professionals, with enhanced exposure to entrepreneurship through university and corporate initiatives working to make launching businesses easier and more accessible. As a result of these efforts, Tokyo has increased its share of late-stage funding deals compared to the rest of the Asian region.

“Supporting startups is indispensable for Japan; startups serve as vital catalysts for innovation and economic expansion,” says Hiro Nishiguchi, President of Startup Genome Japan. “A transformative approach is imperative, with a paramount focus on nurturing startups to cultivate new engines of growth. Supporting startups holds the potential to mitigate demographic challenges confronting Japan, such as an aging population and dwindling workforce, by generating fresh employment opportunities and attracting talent.” In recent years, employment in Japanese tech has been fueled by women entering the workforce, with JVCA noting that there is more potential for women in the industry to grow in the next 10 years. Across the country, JVCA has reported a growing wage gap between startups and listed companies, with startups offering higher pay that attracts top industry professionals. The proportion of positions offering an annual income of $65,000 or more is 1.6x higher at startups than at publicly listed companies.

Supporting a Spirit of Innovation

Strengthen funding and exit strategies by enhancing In Tokyo, the spirit of innovation is prevalent and driven by startups that are developing world-changing technologies. “By fostering the startup ecosystem, Japan stands to access novel ideas, technologies, and business models essential for bolstering its competitiveness on the global stage,” says Nishiguchi. “Startups often introduce fresh perspectives and operational agility to industries, challenging conventional norms and encouraging established enterprises to innovate and adapt. In essence, fostering a vibrant startup ecosystem is not just advantageous, but essential for Japan’s sustained competitiveness, economic vitality, and effective response to societal changes.”

Locally, a rich tapestry of investors, incubators, government entities, and industry associations work together to spark vibrancy. Tokyo Metropolitan Government’s startup strategy, Global Innovation with STARTUPS, nurtures startups through acceleration and promotion of open innovation. The initiative is related to the national government’s Startup Development Five Year Plan, which REGIONAL INSIGHTS ASIA 03 aims to boost investment in startups to $65.8 billion by 2027, with the goal of producing 100 unicorns.

By building entrepreneurial talent through the expansion of mentor support programs, increasing the number of overseas incubation centers, and supporting startup creation in universities and among young students, the Startup Development Five Year Plan will promote the domestic startup community. Additionally, it will capabilities of public and private funds and encouraging investments from venture capitalists. Tax measures to encourage open innovation will be implemented, with the establishment of private restructuring laws and the expansion of international accounting standards promoting M&A.

“Fostering a vibrant startup ecosystem is not just advantageous, but essential for Japan’s sustained competitiveness, economic vitality, and effective response to societal changes.”

Hiro Nishiguchi 

President of Startup Genome Japan

Tokyo support organizations include CIC Japan G.K., the largest innovation center in Japan that is home to more than 250 startups, VCs, and researchers and Keio Innovation Initiative, a VC firm established by Keio University to support startups in creating innovative new businesses by utilizing the research results of local universities and research institutes. The University of Tokyo, a world-class center for research, ranked 29th in the World University Rankings 2024, the highest position for a Japanese institution since 2015. The University of Tokyo Edge Capital Partners works with academia in Japan and abroad to support science and technology startups that are innovating to solve global issues.

“Startups often collaborate with established companies, research institutions, and government agencies, facilitating knowledge transfer and fostering a culture of innovation across the ecosystem,” says Nishiguchi. “They are fostering innovation in Japan by introducing disruptive technologies, experimenting with novel business models, and challenging existing norms. Startups are driving innovation across various sectors, including healthcare, finance, and manufacturing.”

Scaling Startups for Global Success

Startup Genome, in partnership with the Tokyo Metropolitan Government, launched Global Hypergrowth Tokyo in March 2024, a next generation late-stage scaling program to propel leading Tokyo tech startups into successful global commercialization. The companies selected represent a variety of sub-sectors, including Deep Tech, Life Sciences, and AI, and have raised close to $100 million in total funding as they look to expand overseas.

One unique aspect of the program is its top executive mentoring and coaching designed to foster thought leadership around branding and positioning, marketing advice, and global commercialization. Selected startups are continually matched with international contacts for 1:1 mentorship, take part in monthly expert sessions, and go before global advisory panels to pitch ideas and receive feedback.

Through Global Hypergrowth Tokyo, startups are given the confidence they need to solve globalization challenges, such as training on cultural and language barriers and positioning for the best pitching possibilities. Support sessions and events provide a two-sided marketplace for knowledge and connections.

“Programs like Global Hypergrowth Tokyo play a crucial role in helping Japanese startups achieve growth by providing them with access to resources, mentorship, funding, and international networks,” Nishiguchi says. “These programs offer opportunities for startups to scale their businesses, expand into new markets, and attract investment. Moreover, participating in such programs exposes startups to diverse perspectives, best practices, and global trends, which can inspire innovation and accelerate growth.”

In its inaugural cohort, Global Hypergrowth Tokyo supports 21 innovative tech startups:

• Proprietary industrial drone solutions company Aerosense
• AI and robotics waste management company Aladdin
• Pharmaceutical manufacturing optimization company Auxilart
• Decarbonization company BIOTECHWORKS-H2
• Enzyme services and products company bitBiome
• AI digital marketing and sales solutions provider Capex
• PCB manufacturer Elephantech
• Fermentation technology company Fermenstation
• Regenerative medicine company Flying Cell
• Carbon credit solutions provider Green Carbon
• Sustainable energy company Helical Fusion
• AI company I’mbesideyou
• Bioconjugation technology company NGENIESS Biosciences
• Plant-based alternatives company PEEL Lab
• NFC e-receipts company Pi-xcels
• Sound and light interface technologies company Pixie Dust Technologies
• Silk shampoo manufacturer THE RICH
• 3D AI algorithm design company RICOS
• Cancer immunotherapies developer SCM BioMedica
• Plastic and paper alternatives developer TBM
• Robotics company Yukai Engineering

For Yuji Suzuki, CEO of bitBiome, Global Hypergrowth Tokyo offers an opportunity to accelerate the company’s growth in the U.S. and Europe while still benefiting from the local ecosystem. “We enjoy the benefits of the Tokyo ecosystem, including access to clients and talent, and laboratory space, to name a few,” Suzuki says.

The startup hosts a 1.5 billion genome database and enzyme delivery platform that is supported by unique, patented, single-cell whole genome sequencing. Obtained from a myriad of environments including soil and marine water, bitBiome’s microbial genome database is among the world’s largest and highestresolution single-cell microbial genome libraries. “As part of Global Hypergrowth Tokyo, not only can we grow as a company financially and organizationally, but we can also help humankind to address global issues such as climate change through our unique technology together with clients and partners across the world,” Suzuki says.

“With the help of Global Hypergrowth Tokyo, we will grow quickly and bring our upcycle technologies and solutions abroad.”

Lina Sakai 

Founder and CEO of Fermenstation

Biotech startup Fermenstation converts unused biomass such as side streams to essential low carbon, regenerative ingredients for various industries to achieve a circular economy. Its original database of enzymes and microorganisms makes it possible to transform plant waste into new ingredients that improve health, nutrition, and sensory experiences.

“Now that there is a growing global need for more sustainable green ingredients, we feel now is the time for us to challenge ourselves with global business expansion,” says Lina Sakai, Founder and CEO of Fermenstation. “With the help of Global Hypergrowth Tokyo, we will grow quickly and bring our upcycle technologies and solutions abroad.”

Sakai added that the Tokyo ecosystem has provided an opportunity to connect with a global network and experienced mentors as well as entrepreneurs with a similar passion towards a sustainable circular economy. “We are excited about the chance for Fermenstation to become a leading developer of regenerative biomaterials from plant waste and at the same time to realize a world where there is no waste,” Sakai says.

“It is evident that Japan’s startup ecosystem transformation is irreversible,” says Nishiguchi. “Japan’s economy and society are adapting to startup culture and showing readiness to embrace change.”