Japan

Tokyo #9

MEMBERS:
Tokyo Metropolitan Government Deloitte Japan

Tokyo's startup ecosystem has continuously been expanding because of the digitalization in various industries even amidst COVID-19. Tokyo launched the "Tokyo Consortium” in 2020 with 220+ VCs, leading companies and universities etc, to enter the new era together with startups.

Eiichirou Kodama
Director General for Global Financial City Strategy, Office of the Governor for Policy Planning, Tokyo Metropolitan Government
Top 10 Global Ecosystem: Talent & Experience
Top 10 Global Ecosystem: Knowledge
#1 Asian Ecosystem: Funding

Highlights

For decades Japan has been known as an industrial powerhouse, but also an economy that’s relatively closed to international talent. That’s beginning to change as the government rolls out the welcome mat in an effort to boost local startups. A new startup visa is available in National Strategic Special Zones, including Tokyo. Depending on the area, successful applicants are granted a 6-month or 1-year temporary residence permit. In December 2020, Tokyo ranked third in the Mori Global Power Cities Index, which analyzes cities’ attractiveness for relocation based on startup activity, levels of R&D, and livability. This new spirit of openness and innovation can be felt at Tokyo’s many startup hubs and events. Venture Café Tokyo, founded on the principle of “serendipitous collision,” connects founders, investors, and students. Non-profit Startup Lady Japan helps women conduct business locally and internationally. It runs a 60-day Startup Challenge and a 6-week startup boot camp featuring intensive workshops and mentorship. Tokyo also hosts the Gartner IT Symposium/Xpo, where IT executives and experts convene virtually to share insights, as well as the Tokyo Financial Information & Technology Summit, which focuses on data and technology in capital markets. Notable funding news coming out of the ecosystem includes the announcement of US$100 million in financing for mobile gaming company Playco in September 2020, bringing the company’s valuation above $1 billion and adding it to the list of Japanese unicorns. Space technology company Axelspace raised a $24 million Series C in May 2021.

Ecosystem by the numbers

TOTAL EARLY STAGE FUNDING
$2.8 bn
GLOBAL AVG.
$548 m
ECOSYSTEM VALUE
$40.7 bn
GLOBAL AVG.
$13.68 bn
MEDIAN SEED ROUND
$565 k
GLOBAL AVG.
$480 k
MEDIAN SERIES A ROUND
$2 m
GLOBAL AVG.
$3 m
SOFT. ENGINEER SALARY
$70 k
GLOBAL AVG.
$44 k

Sub-sector Strengths

Advanced Manufacturing & Robotics

Japan has long dominated the Robotics sub-sector, leading the world in supplying industrial robots in 2017, according to the International Federation of Robotics. The city’s startups are now exploring new frontiers by supplying robots and satellites to the growing global space industry, which is set to generate more than $1 trillion in revenue in 2040, according to Morgan Stanley. Space startup Gitai raised a $17.1 million Series B round in March 2021, while Axelspace raised a $23.8 million Series C in May.

Fintech

Japan’s fintech market is expected to grow by 51% annually to $11 billion by 2022, according to FinCity.Tokyo, an organization founded by the Tokyo Metropolitan Government to promote the city as a Fintech hub. Mobile banking startup Kyash raised a total of $68.9 million over 4 rounds. Online security brokerage service Folio offers has raised $87.5 million also over 4 rounds. Automated investment advice company Money Design has raised $107.2 million in funding, over 9 rounds.

Life Sciences

Hundreds of Life Science startups have emerged from the University of Tokyo, and an increasing number of companies in the sub-sector are bringing solutions to clinical trials. BNV launched a $50 million+ fund primarily focused on healthcare startups. Mizuho Financial Group also established a ¥5 billion (~$47 million) investment fund for Life Sciences startups. More than 4,000 Japanese clinics and hospitals now use startup Micin’s telemedicine solution. Microbiome analytics company bitBiome secured a JPY700 million (~US$6.6 million) Series B in September 2020. Fitness app maker Finc raised $46.1 million in February 2020. Drug development company Modalis Therapeutics raised JPY 3.24 billion (~$30.4 million) in its IPO in August 2020.

Reasons to move your startup to Tokyo

International Connections

In 2020 the Tokyo Metropolitan Government established Startup Ecosystem Tokyo Consortium, an association of businesses, universities and local governments aimed at nurturing local startups. Foreign investors are engaged in the effort, including U.S. startup workspace company Cambridge Innovation Center (CIC), which recently opened a hub in Tokyo. The JETRO Innovation Program aims to facilitate connections between Japanese Life Sciences startups and the Massachusetts Life Sciences ecosystem through 3 months of tailored mentoring, pitch preparation, and networking.

Startup Community

Startup Genome
Members

Startup Genome
Partners

Japan Venture Capital Association (KII, UTEC)
Keidanren
Keio University
Mitsubishi Estate
Mitsui Fudosan
Mori Building
Plug n Play
The University of Tokyo
Tokyo Chamber of Commerce and Industry
Tokyu
Tokyu Land Corporation
Waseda University

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Local Ambassadors

Chuzen Kin
Chuzen Kin is an international strategic marketing/PR consultant and facilitator with extensive experience in APAC and US markets across media. Experienced in enterprise software solutions, media management, corporate branding, product branding, analyst relations building.
Chuzen Kin | Ambassador
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