Five companies. $9.47 billion. These are the most valuable startups in Japan now. 

I’m scouring Japan for the next billion-dollar startup. So I wondered: What are the most successful Japanese startups so far, and what can I learn from them? 

Japan’s Biggest Startups

I focused on the top 5 private tech startups in Japan today. Collectively, they’re valued at over $9 billion. They range from AI labs to biomanufactured proteins:

What struck me right away is that not all of the top five are in Tokyo! Yamagata is home to Spiber, a biotech valued at $1.2 billion.

These companies are doing some amazing things. Sakana AI has released an AI scientist that writes academic papers. Spiber is creating proteins to replace cashmere, wool, and fur. 

I notice a greater deep tech and research bent compared to America. More robotics and biotech, less SaaS. 

This tells me to look for more than just software companies.

Beyond the Top 5

These five companies aren’t the only highly successful startups in Japan. 

Japan has around 10 unicorns currently, give or take a couple depending on which source you rely on. They span a variety of fields, from video games to crypto platforms. 

Japan’s startups may not be the biggest in the world. But given the lack of capital in Japan, the entry prices for most were probably quite low.

This means a massive multiple on cash for early investors.

Japan’s Biggest Exit

It’s one thing to notch a high valuation in a funding round. Getting liquid is much harder.

The biggest startup exit in the last decade in Japan is Mercari, which lets you buy and sell used goods online. It went public in 2018 and is valued at about $4.4 billion in the public markets.

Almost every Japanese person I’ve met was quite frugal. And given the difficult economic situation, people have all the more reason to buy used and sell unnecessary possessions.

Startups that help people save money or make extra income are good bets in Japan. I’m keeping an eye out for more like this…

Wrap-Up

If I can find investments where others aren’t looking, I can make a lot of money.

When I was in Tokyo recently, I met one talented builder after another. But there isn’t enough risk capital in Japan to fund their companies.

Companies like Sakana AI and Mercari prove Japan can produce serious returns. Bring in more American investors, and there’s no telling what Japan can do. 

If you’re an awesome founder in Japan struggling to raise money locally, shoot me a message. I’m excited to learn about what you’re building!

Have a great weekend, everyone!

More on tech: 

Inside Japan’s Startup Boom: Elite Engineers, Exploding Revenue, and Almost No Funding

The US-Japan Hybrid Startup: Move Founders to America, Keep Talent in Japan

So You Didn’t Hit $100M ARR in 6 Months — Fundraising Advice for The Rest of Us

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