Your Guide to Japanese Venture Capital & Investment

Japan is more than just a tech-savvy market; it is a thriving hub for venture capital and strategic investment. Backed by strong government initiatives, Japan is actively looking to partner with innovative foreign companies, and this guide will show you how to navigate this evolving landscape to find the right investment partners.

Japanese Investment: By the Numbers

The Japanese venture capital (VC) ecosystem is experiencing significant changes, driven by both private and public initiatives.

Key Statistics:

• Government Commitment: The Japanese government's "Startup Development Five-Year Plan" aims to increase investment in startups tenfold by 2027. They have a target of creating 100,000 new startups and 100 "unicorn" companies (valued at over $1 billion).
• Tokyo as a Hub: Tokyo has solidified its position as a global VC hub, ranking among the top 20 cities globally in terms of fund value and deal value. The Tokyo metro area alone accounts for approximately 80% of all startup funding in Japan.
• A Shift in Funding: While overall funding saw a slight decrease in 2024, the median funding per company has increased, indicating that investors are placing larger bets on fewer, more strategic startups. In the first half of 2025, direct investments from corporations nearly doubled year-on-year, showing a clear trend towards corporate involvement.

Understanding the Japanese Investor Mindset

Japanese investors, particularly large corporations and traditional VCs, operate with a different set of priorities than those in Silicon Valley or Europe.

• Relationships over Transactions: The Japanese business world is built on a foundation of trust and long-term relationships (shinrai). Investors will want to get to know you and your team over a series of meetings, often informal ones.
  • Don't rush the process; patience and persistence are seen as a sign of commitment.
• Credibility and Stability: Japanese investors place a high value on a company's stability and credibility. They want to know you are committed to the Japanese market for the long haul.
  • A Japan-specific business plan, a local team, or even existing partnerships can significantly increase your credibility.
• Due Diligence: Thorough and Detailed: Investors will scrutinize every detail, from your intellectual property protections to your employee contracts and business structure. They are risk-averse, and a thorough process is their way of mitigating potential issues.
  • Be prepared with detailed documentation and transparent communication.

Key Players: Investors Actively Seeking Foreign Tech

The landscape of investors is evolving, with many firms actively seeking foreign companies to bring new technologies to Japan.

Corporate Venture Capital (CVCs):

These are often the most strategic and patient investors.

• Sony Innovation Fund: The venture arm of Sony Corporation focuses on early-stage startups in AI, robotics, fintech, and entertainment. It actively seeks out international companies that align with Sony's long-term vision.
• SoftBank Vision Fund: SoftBank have a history of making large-scale investments in foreign companies with disruptive technology.
• Hitachi Ventures: The CVC arm of the Hitachi Group is expanding its focus and leadership, notably appointing a new head to lead investments in India, in sectors like AI, biotech, and mobility. This signals a growing appetite for international ventures.
• New CVC Funds (2025): Fujitsu Ventures Fund II, Mitsui Chemicals and several other large Japanese corporations have launched new CVC funds. This highlights the strategic importance of startup engagement for Japanese companies.

Independent VCs:

These firms are becoming increasingly dominant and are more financially driven.

• Global Brain: One of Japan's most active and well-known independent VCs, Global Brain invests across multiple stages and industries, with a strong history of supporting both domestic and international companies.
• UTEC (University of Tokyo Edge Capital): As one of Japan's largest deep tech VCs, UTEC invests in science and technology-focused startups. It's a key fund to approach for ventures in biotech, robotics, or advanced AI, regardless of their country of origin.
• East Ventures: This firm has a strong presence in Japan and Southeast Asia, investing in tech companies that have cross-border potential, from fintech to consumer internet.
• DCM Ventures: With offices in both America and Asia, DCM has a global investment thesis, making it an ideal contact for foreign founders looking for a Japanese partner.

Real-Life Examples of Success

These companies have successfully raised capital from Japanese investors, providing a clear roadmap for success.

Paidy (Fintech):

• Solution-Oriented: Paidy's success was built on a deep understanding of the Japanese payments market and a localized solution that addressed the widespread preference for not using credit cards.
• Investor Appeal: Its ability to build a large user base and demonstrate a clear market pain point attracted investment from major firms like Itochu Corporation.

Sakana AI (Deeptech):

• Dual Fundraising Strategy: With foreign founders, they secured investment by taking a two-pronged approach.
• Global Credibility: It attracted lead investment from top-tier Silicon Valley VCs like Khosla Ventures.
• Japanese Commitment: Simultaneously, it secured a broad range of Japanese strategic investors, including the three largest banking groups (MUFG, SMBC, and Mizuho) and tech giants like Fujitsu and NEC, proving its commitment to Japan's AI ecosystem.

Conclusion

Securing investment in Japan is a strategic effort that hinges on building trust, focusing on long-term relationships and credibility, and proving your committment to Japan’s dynamic tech market.

At Omnilinks, we specialize in Japan market entry, and our investment strategy is designed to help you navigate any complexities.

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