Startup Genome helping to make Tokyo the 'most startup friendly city' in the world

Anna Vod · April 8, 2024 · Short URL:

Late-stage scaling program expands amid slump for other support programs

When Vator launched as a platform to connect investors and entrepreneurs some 15 yrs ago, venture capital was still considered a niche industry. Now the VC industry isn't just exponentially bigger, the commercialization chasm has become commensurately challenging.   

This is particularly complex for companies that don't have the relationships and network needed to successfully cross that canonical gap, particularly in the US, the undoubtedly biggest market in the world. 

Startup Genome is hoping to change that. The UK and US-based company and the Tokyo Metropolitan Government just announced their joint development of a new mentoring program called Hypergrowth Tokyo. The goal: “to propel the best Tokyo tech companies into successful global commercialization and expansion into international target markets.” 

The partnership aligns with the position set out by the Tokyo government to make it the "most startup friendly city" in the world. This venture is a manifestation of that goal and will bring more than 20 companies into the program. 

While Startup Genome is supporting startups, it is not a traditional accelerator that focuses on young, pre-product-market-fit startups. In other words, Startup Genome companies aren't starting up, but in fact, scaling up, and should therefore be more appropriately referred to as "scaleups." Startup Genome will provide the scaleups with access to global mentors, scaling advice from leading executives, go-to-market support, and connections to potential leads and investors, the company said.

For these Tokyo companies, it’s an opportunity to tap into U.S. sales channels, among other perks.

As Hiro Nishiguchi, President of Startup Genome Japan, said in a statement, “Japan’s startup ecosystem has been maturing for the past ten years, supported by both domestic and international stakeholders, and the globalization of our startup ecosystem is the key factor in driving the startup-driven growth of our country.”

Segments of focus at Hypergrowth include deep tech, health tech, sustainability, and AI. For example, to name a few of these unique innovators, Aladdin is developing solutions for waste management with AI. Fermenstation is turning plant waste into useful material. Flying Cell focuses on regenerative medicine using magnetic targeting. Pixie Dust Technologies is building computer technologies by utilizing interface technologies based on sound and light. There’s also a shampoo maker, The Rich, that uses silk technology.

The program, which was kicked off formally with an event in Tokyo at the end of March, will last about 10 months and is fully funded by the Tokyo Metropolitan Government. 

Startup Genome around the world and expanding

While Startup Genome appears to be expanding, accelerator programs targeting young startups appear to be restructuring and/or struggling. 

While the VC picture in 2023 soured overall as U.S. venture capitalists raised 60% less capital amid interest rate hikes and startups received 30% less funds than the year before, the multi-year trend sends a clear sign to the accelerators. Competition from growing VC firms and the abundance of digital tools have pushed accelerators to rethink their models and restructure. Thus, famed accelerator Techstars, which positions itself as “the world’s most active pre-seed investor” and has a global footprint, closed several of its local entrepreneurship locations including its Boulder, Colorado, unit in a short period of time and is moving its headquarters to New York. Techstars thus inverted its initial founding focus and the success that rooted from it. The company is also cutting its programs worldwide, laying off staff, and may soon lose its partnership with J.P. Morgan following lower-than-expected revenue and losses in 2023.

Meanwhile, Startup Genome has a presence in Canada, in partnerships with Montreal and Quebec, working with a portfolio of companies. Startup Genome also works with governments and private sector organizations to accelerate the success of their startup ecosystems to fuel sustainable job growth. Startup Genome has advised more than 160 governments and innovation agencies overall.

We will likely hear more of these Hypergrowth programs this year.  

(Full disclosure: Vator works in partnership with Startup Genome on certain projects).

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