Startup Fundraising: How Are Japanese Startups Raising Funds and Growing in 2025?

 As of 2025, the Japanese startup ecosystem is seeing increased attention in business media around funding strategies and growth models. Here are the key topics:

1. Growing Investment in Deep Tech Startups

Startups with advanced technologies are attracting large-scale investments from both domestic and international investors.

  • ArkEdge Space: A University of Tokyo spin-off developing ultra-compact satellites, raised ¥8 billion in its Series B round.

  • Encoat Technologies: A startup working on perovskite solar cells, raised ¥6.3 billion in its Series C round.

These cases highlight the growing investor interest in the deep tech sector.

2. Fostering Unicorns with Government Support

The Japanese government has declared a “Startup Creation Year” and aims to nurture 100 unicorns over the next five years.

  • As of 2025, there are around eight unicorns in Japan. However, this number is expected to grow thanks to government initiatives.

3. IPO Market Trends and Diversifying Growth Strategies

Initial Public Offerings (IPOs) and mergers & acquisitions (M&A) are gaining traction as key growth strategies for startups.

  • At the “Startup Conference 2025,” co-hosted by EY and Daiwa Securities, experts discussed IPO trends, growth via M&A, and IPO considerations.

Notable Japanese Unicorns

1. Preferred Networks, Inc. (PFN)

  • Sector: Artificial Intelligence (AI), Machine Learning
  • Overview: Uses deep learning across multiple sectors including autonomous driving, industrial robotics, healthcare, and biotech.
  • Valuation: Approx. $2 billion (¥283.8 billion)
  • Key Investors: Toyota, NTT, SBI Group

2. SmartNews, Inc.

  • Sector: News Aggregation, Mobile App
  • Overview: Distributes personalized news content through its app, with over 10 million monthly active users across Japan, the U.S., and China.
  • Valuation: Approx. $2 billion (¥283.8 billion)

3. SmartHR, Inc.

  • Sector: Cloud-based HR and labor management (SaaS)
  • Overview: Provides a cloud service to streamline payroll, social insurance procedures, and attendance management.
  • Valuation: Approx. $1.6 billion (¥227 billion)

4. Sakana AI, Inc.

  • Sector: Generative AI, Artificial General Intelligence (AGI)
  • Overview: Developing a “collective intelligence AI” that combines multiple foundational models. Founded in 2023, it quickly reached unicorn status.

5. NOT A HOTEL, Inc.

  • Sector: PropTech, Hospitality
  • Overview: Operates a unique accommodation concept that blends ownership and usage of vacation homes.
  • Funds Raised: ¥10.5 billion

6. Terra Charge, Inc.

  • Sector: EV Charging Infrastructure
  • Overview: Handles proposal, installation, and maintenance of EV chargers.
  • Funds Raised: ¥10 billion

7. Regional Fish Institute, Ltd.

  • Sector: Aquaculture, Biotechnology
  • Overview: Develops next-generation aquaculture systems combining ultra-fast breeding with smart farming.
  • Funds Raised: ¥4.07 billion

8. Pocketalk, Inc.

  • Sector: AI-based Translation Devices
  • Overview: Develops and sells AI-powered portable interpreters known as "Pocketalk."
  • Funds Raised: ¥2.5 billion

These names are frequently seen in Japanese business media. It would be interesting to see how they are perceived or performing outside of Japan as well.

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