Why Japan Is Becoming Top Startup Destination
Japan’s growing startup ecosystem, backed by major government funding and global attention, is now too significant for the world to overlook.
Japan’s Startup Ecosystem Is Rapidly Expanding
After a recent trip to Tokyo, it’s clear that Japan is quickly becoming a key player in the global startup scene. The country’s startup ecosystem is large, growing fast, and receiving strong support from the government and international investors.
The visit was part of the first Scaleup Summit Japan, organized by Mind the Bridge and JETRO, Japan’s agency for international business development. The summit coincided with SusHi Tech Tokyo, one of the region’s top startup events. The trip also included a tech mission to connect international companies with Japanese startups and technology.
A broader mission is already in the works for next year to build even deeper connections with Japan’s startup environment.
Japan Has a Strong Startup Foundation
Japan is home to nearly 22,000 startups and 2,300 scaleups. Among these, 86 startups have raised over $100 million, and six have achieved unicorn status. This puts Japan on a similar level with countries like France and Germany.
Government Funding Fuels Fast Growth
In 2022, Prime Minister Kishida launched the Startup Development Five-Year Plan. Between 2023 and 2027, the government aims to invest 10 trillion yen to grow the startup count to 100,000 and create 100 unicorns.
These are bold goals, but Japan is known for following through with structured, long-term strategies. In 2024 alone, Japan added 238 new scaleups and attracted $5 billion in funding, even as global investment trends slowed.
Japan is especially focused on deep tech and hard tech — areas that require larger investments and longer timelines. Agencies like NEDO play a key role in supporting these kinds of startups.
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Global Investors Are Taking Notice
Countries around the world are already moving to establish a foothold in Japan’s startup space. The U.S. remains a leading presence, with 15 out of 41 international innovation hubs in Japan being American.
France and Germany are also expanding rapidly. As EU Ambassador Jean-Eric Paquet noted, shifting global politics could open the door for more nations to form stronger ties with Japan’s startup market.
Japanese Corporates Could Drive the Next Wave of Startup Innovation
Japan’s large corporations have traditionally relied on in-house research and development. But that’s changing. More companies are now exploring open innovation—working with startups and outside partners to stay competitive.
This shift could be a game-changer. Major corporations like Mitsubishi, which operates across sectors such as automotive, energy, materials, and food, are starting to centralize their innovation efforts. New initiatives, such as corporate venture capital arms and AI-focused teams, are leading this transformation.
Japanese firms also maintain strong connections with global innovation hubs. Japan is the top foreign corporate investor in both Silicon Valley and the U.S. East Coast, giving its companies a front-row seat to emerging startup trends.