During his recent visit to California, Prime Minister Abe announced that the Japanese government wanted to assist Japanese ventures enter the American market and Silicon Valley: “I want individuals highly motivated and talented to take the plunge and launch business in Silicon Valley,” home to advanced IT-firms, Abe told at an event held at Stanford University. While Japan has a few examples of successful entrepreneurs, including Mr. Mikitani (Rakuten) and Mr. Son (Softbank Corp.), the environment is generally less favorable for startups seeking to introduce new technologies that threaten the status quo. The structural measures are meant to be — along with robust fiscal spending and monetary easing — the “third arrow” of Mr. Abe’s economic strategy.
Recently, three major startup related events were held in Tokyo, further demonstrating the importance given to young, disruptive companies:
- The European Pioneers Festival arrived in Tokyo with Pioneers Tokyo on March 28; 10 Tokyo based start-ups pitched their companies to a panel of 5 experts. Bowel movement notifier D Free won the Tokyo pitch event and will move on to the Pioneers Festival in Vienna.
- A startup pitch-contest was held for the first time during Japan’s New Economy Summit organized by Japan’s Association of New Economy (JANE) which is headed by Rakuten-Founder Hiroshi Mikitani. The nine finalists are are described here.
- Slush Asia was held in Tokyo on April 24: 50 startups entered the pitch-battle; Taiwan-based VMFive and inventor of AdPlay won the battle.
Many of Japan’s recent startups that made the news are related to mobile apps and software. However, also the makers’ scene is picking up traction and spinning off various startups. Some of the recent note-worthy startups:
- SmartNews, the No. 1 news app in Japan, surpassed 10 million downloads in February and is now further expanding into international markets. Its machine learning algorithms evaluate tens of millions of articles and use social signals and other factors to determine which stories are worth reading at any time in any location.
The company has raised $40 million in two rounds of financing. The most recent cash infusion, $36 million in August of last year, was led by Atomico, and the Japanese social games company Gree.
- gengo (formerly mygengo founded in 2008) is a crowd-sourced translation service that consists of more than 10,000 translators from 114 countries working across 34 languages. Gengo announced in April of this year a round-C series funding of $5.4 million led by Recruit Holding of Japan. With the Olympics being held in Japan in 2020, the backers see big growth opportunities for this translation service.
- Pocket Supernova is the mobile development studio responsible for apps like VideoSelfie and WatchMe Messenger. The video message app with contextual decorations and dynamic text animations “WatchMe” is described as “World’s first messaging app entirely designed for the apple watch” and while being featured by Apple is no guarantee of success, it’s certainly a nice boost for the small Japanese startup.