CEO Insights Magazine

The past decade has been kind to the Japanese startup ecosystem, which has been on a bull run ever since 2013. According to reports, investments have grown 10-fold in the last 10 years, representing 25 percent CAGR. In the last year alone, Japanese startups collectively raised approximately JPY 850 billion (around $6 billion). To add some context, this is more than what South Korean startups received (approx. $4 billion) and close to the influx into the German startup ecosystem. (approx. $8 billion). A fair amount of credit for this bull run can be attributed to Japanese corporations that have been open

and aggressive in working with startups like never before. Most major corporations in the country now boast CVCs, direct investment programs, and dedicated teams for “open innovation” to work with startups. This has resulted in partnerships and M&A becoming more common.

In 2023, Japan witnessed corporate M&A deal value flaring in magnitude, hitting a total of $123 billion, which manifests a 23 percent increase from the previous year. This trend has only gained further momentum in 2024, with more high-profile deals setting the tone. In truth, the weakening yen (majorly due to the divergence between American and Japanese monetary policy) has become a blessing in disguise. It has not only made Japanese companies more attractive to foreign buyers, boosting inbound M&A interest, but also reduced Japanese firms looking for acquisitions abroad. Given the Asia Pacific region’s 25 percent decline in deal M&A values, Japan has shown resilience, and Japanese companies are increasingly looking overseas for growth opportunities, which will be on the back of the momentum from 2023. We think it is the right time to shed some light on the entrepreneurial ecosystem in Japan. Do let us know your thoughts.