Startups In The Land Of Gold: The Japanese Ecosystem Unveiled, Part 2

June 1, 2021

This article is part of the Crunchbase Community Contributor Series. The author is an expert in their field and a Crunchbase user. We are honored to feature and promote their contribution on the Crunchbase blog.

Please note that the author is not employed by Crunchbase and the opinions expressed in this article do not necessarily reflect official views or opinions of Crunchbase, Inc. 


This story is the second in a series of articles covering the Japanese startup ecosystem edited by the Japan Cabinet Office. You can find part one here.

*The startups in this article were selected by the local consortium and the accelerators in charge of support programs. They are not the only ones that represent each region.

 

Osaka / Kansai Expo 2025 will accelerate innovation in Japan

Back in the eighth Century, Kyoto in the Kansai-area was the capital of Japan for more than a thousand years. Kyoto prospered with cultural and historical art: temples, shrines, trade, restaurants, and traditional entertainment like geisha. Next door to Kyoto, Osaka rules the present Kansai-area. The population is second to Tokyo. It was once called the kitchen of the nation. Products such as crops, agricultural products, and marine products gathered from across the nation. The reason is very simple; Osaka is geographically located in the very center of Japan.

The consortium of Osaka, Kyoto, and the beautiful bay area Kobe have now collaborated together to form a partnership to support startups in the Kansai area. The population of these three areas totals 16.76 million, exceeding the population of Tokyo itself. 

Not only does the large population size attract startups, but the Osaka / Kansai Expo 2025 is another important factor. The Expo’s theme is “Designing Future Society for Our Lives.” The local governments are working on various Proof of Concept (PoC) projects together with private companies and startups. This big event will truly be a huge catalyst for the Kansai ecosystem.

The three cities were selected by the Japanese government as the “Global Startup Hub Cities.” These regions have many startups in life science-related industries, including healthcare, manufacturing, and IT. Osaka is known for its abundance of major enterprises, investment funds, and human resources. Kyoto is famous for its traditional culture, art industries, tourism and university research. Lastly, Kobe is a pioneer in field tests and the promotion of public procurement.

Some of the startups the consortium believes will contribute to the industry strengths in Osaka, Kyoto, and Kobe are:

  • SIRC, originally from Osaka University, provides new functions with unique multiplier devices. These devices are high quality multi-functional small chips that can generate power, power factor, harmonics and frequency in real-time. The small size SIRC device can be installed in places where conventional sensors could not be installed. This provides a detailed power saving solution with a wide range of applications.
  • PaylessGate provides a seamless experience through authentication and payment with a smartphone in your pocket. It is similar to Amazon Go’s system but without pre-authentication.
  • Integral Technology automates CAE processes with their original software, to contribute to a faster and more efficient manufacturing process.
  • mui lab, in Kyoto‘s “furniture district,” is a technology design startup. Instead of letting technology control human’s behaviour, they integrate technology in a subtle way to harmonize with our ordinary lives. Their first product is an IoT product with the wooden surface acting as a touch panel.
  • Atomis, originated from Kyoto University, leverages expertise in a new class of porous materials, called metal-organic frameworks (MOFs). The company is aiming to efficiently store industrial gas and molecular separation.
  • T-ICU provides remote intensive care solutions. A network of specialists and doctors provide consultation for doctors and patients in medical care.
 

Fukuoka aims to become Asia’s leading city

Fukuoka is now said to be the fastest growing city in Japan. The city’s economy is booming and continually promising. With a population of 1.6 million people, Fukuoka has the highest population growth rate compared to any other Japanese city. This is not only because of the high birth rate but also the welcoming of non-Japanese residents around the world.  Although the population grows, the prices in the city are still low. This factor, together with the incentives for entrepreneurs, makes it an ideal place to establish a new company.

Fukuoka aims to be the leading Asian city. The city is very active in accelerating startups not only in Fukuoka, but globally. The Global Startup Center established in 2017 by the local government symbolizes the city’s mindset towards such global support. Fukuoka has signed MoUs with 15 partners in 11 countries / regions. It’s also issued 66 startup visas to double the number of startups and strengthen the “Fukuoka Ecosystem.” The city actively accepts PoCs to promote innovation and new business creation. This is due to the positive activities of the mayor, Soichiro Takashima, who has achieved the status of National Strategic Special Zone for Fukuoka City.

Fukuoka is also famous for inviting and hosting startup events. Four main Japanese startup and VC events such as Fukuoka Startup Selection, Waraku Summit, B Dash Camp, and Industry Co-Creation were either invited or co-hosted with the local government. Fukuoka’s mayor thinks of creating startups not only in Japan but also focuses on making them global. For this reason, he was invited and has attended the World Economic Forum two years in a row. Some notable Fukuoka startups include:

  • KAICO, a Kyushu University startup, is a medical-use proteins production platform. The company name KAICO means silkworms in Japanese. KAICO builds upon more than a century of silkworm breeding and research conducted at Kyushu University. The company has unparalleled knowledge of both production of recombinant proteins, which are of central importance to modern medicine, and rearing silkworms.
  • Chaintope aims to make blockchain application development easy, fast and more user-friendly for both FinTech and non-FinTech sectors.
  • QUANDO focuses on updating traditional industry processes by creating products, such as remote communication tools, to make field work smarter utilizing IoT / AI.
  • LiLz reduces intense fieldwork labor operations through hardware and software that combines machine learning and IoT technology.
 

Japan’s future as a global startup ecosystem

Japan’s economy has long been supported by manufacturing companies that grew rapidly due to the high growth period after WWII. As the era changes, cities and local governments are highly focused on startups that can digitize the conventional manufacturing industry. Japanese cities and local government leaders are keen on inviting more startups and entrepreneurs globally with startup visas. Any VCs and entrepreneurs interested in Japan should contact the Japan Cabinet Office: openinnovation_csti@cao.go.jp.


Article produced by: Japan Cabinet Office

Written and edited by: for Startups, Inc. & indigo, Inc.

Cover photo by: Louie Martinez on Unsplash