Tokyo startups eye US market for expansion
New series highlighting emerging companies from Japan
The Tokyo government has an ambitious claim: To be the most startup friendly city in the world. While it doesn’t have a timeframe to achieve this goal, the government is certainly making a good faith effort to execute on it.
More than two dozen Tokyo-based startups with unique perspectives and innovative solutions in the areas of AI, robotics, biotech, healthcare, and more, are seeking to enter the U.S. market for investment and strategic partnerships, with the help of the Tokyo Metropolitan Government. Together with Startup Genome, which will operate the late-stage scaling program, the Tokyo government is financing 22 companies to get prepared and positioned to make inroads into the United States this year.
There must be something to these startups for the government to handpick and select them. So we’re kicking off a series providing a brief profile for each of these companies to show how they fit into the competitive landscape and where they could shake things up.
Tokyo economy and fertile ground for startups
This is a positive proactive stance by the Japanese government, particularly due to its struggling economy. The country slid into a recession last year as its gross domestic product (GDP) contracted in the last two quarters of 2023, bringing its economic ranking down to fourth in the world.
But by focusing on the private sector to be the engine of economic growth, Japan is on the right track. That’s because taxes are correlated with the local economy. More economic growth from the private sector, the more money the government takes in to provide services.
Tokyo’s plan is to dedicate $72.4 billion to increase the number of startups to 100,000 from 10,000. It’s setting aside some $750 million to support deep tech and $2.2 billion for drug discovery, according to reports conducted by Startup Genome, a firm that has compiled and collected a comprehensive, longitudinal dataset on startup ecosystems worldwide. This dedication to spark innovation across the private sector is in stark contrast to what’s happening in the US, where tech companies are laying off employees, while more government jobs are being created, a trend that doesn’t bode well for long-term economic growth.
Tokyo has also laid the fertile groundwork to support these startups. Not only to be incubated in the city, but to be ready to scale abroad. Throughout the series, we'll shed light on some of these Tokyo-based companies as they expand beyond Japan.
Some of the companies we’ll be highlighting with brief profiles include: Bitbiome, which is sequencing, cataloging and changing microbial genomes. If you thought the 10 million species of plants and animals that exist on our globe was a lot, you ain’t seen nothin’ yet! They’re everywhere from the cracks in the sidewalks to the inner walls of your gut (yuck). And we only know 1% of them! We’ll also take a look at I’mbesideyou, a mental health provider that’s focusing on training employees to do better at their jobs. It’s a bit like US-based BetterUp.
There’s also PEEL Lab, which has manufactured a new kind of leather, using… wait for it… fruit peels, from pineapples! This kind of leather costs about 90% less than cowhide leather but is more expensive than other types of synthetic leather. Then there’s Pi-xcels, which wants to help make digital receipts more ubiquitous. Yes. We know you can already get your receipts emailed to you or via text. But Pi-xcels also claims to make sense of that receipt data. If they notice a customer has bought a bunch of outdoor plants, well, maybe it’s time to ping them about buying some garden gloves or tools.
Flying Cell is a promising new company focused on improving stem cell therapy, especially as it’s applied to knee osteoarthritis. While stem-cell therapy is the non-invasive approach to repairing bad knees (as opposed to surgery), its use is limited due to conflicting reports about its efficacy. Flying Cell hopes to use magnets to make this type of therapy more mainstream. For all those with bad knees out there, innovation is on the way!
Our series will outline each of these company’s approaches as well as the challenges they face as they try to carve out their niche and establish a strong foothold in the very competitive U.S. landscape.
(Image source: japan-dev.com)
