There are many ways to define and showcase a city’s startup and innovation ecosystem. But regardless of which frameworks you’re leaning on, you cannot leave out the crucial elements that remain constant: culture, corporate, capital, and community.

In the first of a two-part series, I’ll be sharing an overview of Tokyo’s startup and innovation ecosystem by introducing one organisation representing each of the four elements. These organisations are key stakeholders that you’d want to know about and connect with if you’re thinking about expanding your business there.

But first, why Tokyo?

Tokyo’s city GDP at US$965.4 billion ranks number one in the world, with a population of close to 14 million and seven unicorns birthed to date.

The country’s e-commerce, logistics, and fintech industries boast a combined market size of more than US$375 billion, while technologies like AI, AR/VR, and blockchain are fast emerging with expected CAGRs between 45 per cent and 110 per cent year-on-year.

According to Gen Uehara, Head of Asia Pacific at Symphony, there is a significant digitalisation opportunity explained by the gap between the city’s GDP ranking number one in the world, vis-a-vis its digital competitiveness ranking coming in at number 23 globally.

Symphony, a fintech company headquartered in New York, decided to capitalise on this opportunity by entering the market amid the global pandemic. With Uehara-san’s leadership and hustle, they managed to onboard two of the largest financial institutions in Japan as its first investor and client locally.

Yusuke Suzuki, Partner from Global Brain, also shared that the SaaS market in Japan is expected to grow at a CAGR of 13 per cent from 2019 and is expected to reach US$9.6 billion by 2024. There is huge confidence that the local enterprises’ need for B2B solutions and digitalisation is large enough for startups to grow in the domestic market alone.

Also Read: How this Tokyo-based startup is revolutionising the restaurant industry with AI and big data

Masaru Nagura, General Manager from Cambridge Innovation Centre (CIC) Japan, added that there’s never been a better time to enter Tokyo; with the ecosystem flourishing, activity and support from all fronts including the government, corporates, ecosystem builders, venture capitals, universities, event organisers, media.

Culture: Tokyo Metropolitan Government (TMG)

The saying goes that culture must start from the top in any organisation. In the context of a city striving to be a startup and innovation hub, the direction is fuelled by the government.

In March 2021, the Tokyo Metropolitan Government (TMG) announced its Future Tokyo strategy, signalling a strong intent to continue fostering a culture of startups and innovation with an inspiring vision that is accompanied by clear objectives and KPIs to strive for in the mid to long-term.

This culture is propagated through the Tokyo Consortium, consisting of 218 member organisations (and growing), and Invest Tokyo’s comprehensive range of programmes and initiatives that run locally and internationally throughout the year. 

The Business Development Centre Tokyo (BDCT) provides free consultation on in-market business development activities such as market analysis, go-to-market strategy, and business matching for select startups looking to enter the market.

The Tokyo One-Stop Business Establishment Centre (TOSBEC) also provides foreign companies with market setup related services, such as incorporation, business compliance, and taxes.

Corporate: NEC Corporation (NEC)

A global leader in integrating IT and network technologies, NEC plays a crucial role in Tokyo’s startup and innovation ecosystem, with a multi-prong approach towards corporate innovation.

The technology giant has its internal R&D ecosystem and capabilities focused on developing its core product and technologies in AI, network (5G), and security (biometrics).

But they are also actively engaging startups through its open innovation platform in areas beyond its core expertise.

Some examples include their JV with US-based Vista Equity Partners to develop enterprise software solutions for the Japanese market and strategic collaboration with France-based Transgene to develop a new solution in cancer immunotherapy.

Launched by NEC in 2018, NEC X is a corporate accelerator programme located in Silicon Valley that aims to accelerate the generation of new startups and spinoffs.

Each programme is run in batches of anywhere between six to nine months, matching cutting-edge technologies developed by their labs, together with entrepreneurs-in-residence and investors brought in externally from the larger Silicon Valley ecosystem, to incubate new ideas commercialise new businesses.

Capital: Global Brain

One of the leading VCs from Japan, Global Brain has a rich history and proven track record of more than 20 years of investing in early-stage startups. Even amid the global pandemic, the fund invested in 103 deals in 2020 alone and boasted an 80 per cent coverage of the Series A rounds covered in Japan.

Global Brain is unique in that they manage eight corporate venture capital funds. At the same time, their milestones to date currently boast 77 exits (M&As/IPOs) and eight regional offices set up across the world.

Their investment areas include AI, AR/VR, blockchain, climate, cybersecurity, fintech, and Saas, to name a few. The fund has industry and technology experts in all areas they invest in. They also have a dedicated business team to support portfolio companies with business development, human resource, and intellectual property related functions.

Some of the overseas portfolio companies that they’ve successfully facilitated market entry into Japan include the likes of IoT service provider, Unabiz, and cybersecurity solution, Source Defence. 

Community: Cambridge Innovation Centre (CIC) Tokyo

CIC is a global innovation community that aims to support impactful entrepreneurs to fix the world. Founded in 1999 in Boston, United States, the community has a total leased area of 1.23 million square feet across nine cities globally and more than 7,400 member companies since its inception.

CIC Tokyo was established in October 2020 as the largest innovation centre in the city, with a combination of hardware and software focussing on four key areas: energy and environment, life science and healthcare, edutech, smart city.

Its hardware has a capacity of 100 coworking desks, 160 private office rooms, conference rooms, and access to amenities like a kitchen, nap rooms, massage rooms, and nursery rooms. Its software includes a local and international community of 150 residents and over 220 programmes/events hosted. 

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