Many of you are undoubtedly aware of last week’s Viva Technology conference (VivaTech) in Paris. Japan was featured as country of the year for VivaTech 2024. Hats off to the Japanese government officials at JETRO and METI for securing this honour for Japan !
The Country-of-the-Year selection was indeed a big deal for Japan, as the nation sits on the cusp of an innovation renaissance. Frequent readers of this blog know that I am incredibly bullish on early-stage investing in Japan right now. I see greater asymmetric upside here than any other tradfi asset class.
As was the case with booming startup ecosystems that have risen before (Silicon Valley, Western Europe, China, Southeast Asia), their success involved a combination of local and global. Practitioners of innovation know that it best occurs when there is a convergence of talent, ideas, creativity, and resources across disciplines, backgrounds, borders, and cultures.
One negative perception held in Europe about Japan is that Japanese investors speak a lot about being global but fail to actually make investments in global teams.
My defense to such criticism is that becoming comfortable with the cross-border part often takes a bit longer in Japan. The language and cultural gap is a wider chasm to cross than in other markets, so it requires more patience, as well as actors who can help serve as a bridge.
Followers of us at Shizen Capital know that our reflex upon seeing such friction in a system is to accept some accountability for it ourselves, and to try to figure out what role we can play in ameliorating it.
An experimental invitation to Japan’s VCs and CVCs
So in the spirit of serving as a bridge, let’s try a little experiment. While at VivaTech, my partners and I encountered over 30 investment teams visiting from Japan (a mix of independent VC funds, and CVCs), all purportedly scouting for startups and scale-ups in France whose innovations could be relevant for the Japanese market. We were scouting for them too, and have even opened an office in Paris to facilitate such sourcing efforts going forward (as well as serving as a launchpad for our Japanese portfolio companies to expand into Europe).
We understand that investing in companies with foreign founders, business culture, and language is daunting, so we’ll make it easy for you.
Below are 16 such companies which we believe to hold compelling potential for success in Japan. All of them are on our radar at Shizen Capital, and we expect to invest in several of them. If you would like to join us as a co-investor, our door is open. This is an opportunity to prove the critics wrong. We’ll even be happy to serve as lead investor and organize all due diligence efforts and transaction documentation (in Japanese, even !), if it facilitates your ability to act. By revealing our dealflow here, we are being radically transparent. Now, over to you !