Japan’s GDP Falls, But Venture Deals Are On The Rise

Japan slumped into a recession over the weekend after reporting dismal Q3 totals, but the Japanese venture capital scene is alive and kicking on the heels of the strongest quarter to date.

In Q3, Japanese startups saw over $215 million in capital committed across 45 venture rounds, more than twice the amount raised in any previous quarter.

A sizable chunk of the quarterly total came from Tokyo-based news aggregation app SmartNews, whose $36 million in August represents the largest Series B round on record for a startup out of Japan.

This quarter has yet to see a similar influx of cash, with smaller deals for community-powered shopping app Mercari and e-commerce site Locondo.jp among the 15 venture rounds recorded in the past month and a half.

While it remains to be seen whether last quarter’s spike represents an irregularity or the beginning of a Japanese startup boom, investments coming out of Japan are on a definite upswing.

Japanese investors have been more active than ever this year, contributing to 80 venture rounds totaling $635 million in Q3. With Q4’s total nearing $500 million, there’s no sign of letting up toward the end of the year.

And more of these venture dollars are going toward Japanese startups.

This year, Japan-based investors have collectively participated in 179 venture rounds totaling $1.4 billion, nearly doubling last year’s total of $730 million in 130 rounds.

$351 million of this year’s total has gone into Japanese companies, compared to $123 million last year in rounds for Japan-based startups.

Image via Flickr user Karl Baron.

  • Originally published November 17, 2014, updated April 26, 2023