Startups in Japan: here's what you need to know

Japan is on its way to becoming “the place to be” for startups.

Despite the effects of the pandemic still reverberating through the world economy, the startup scene in Japan has continued to thrive. With over 25,000 startups and counting, the country has proven to be a global hub for entrepreneurs in 2026. The question is, why?

One factor is Japan’s unique culture and history of innovation, which attracts entrepreneurs who want to try living in the country. But there’s more to Japan’s startup scene than meets the eye.

That’s why I’d like to talk about the startup ecosystem in Japan. More and more people are becoming curious about the opportunities Japan has to offer. If you’re one of them, this guide will help you filter through the noise and find the info you need.

I’ll start with a general overview of Japan’s startup ecosystem and the many opportunities awaiting foreign entrepreneurs in Japan. Then, I’ll share a list of the top startups in Japan and the leading industries right now.

The Startup Ecosystem in Japan: An Overview

Japan is ideal for anyone interested in starting a business or expanding an existing one. The relevant laws favor the entrepreneur, and the steps you’ll have to go through to set up your business are crystal clear.

A look at the latest funding figures will give you a better sense of where Japan’s startup scene stands today. In 2025, Japanese startups raised a total of JPY 761.3 billion (excluding debt financing), a slight dip from JPY 779.3 billion in 2024. The reason? Investors are becoming more selective when deciding which startups to fund.

What’s particularly interesting is how the investor landscape has evolved. Foreign venture capital (VC) firms are solidifying their presence more than ever. Leading global VCs like Khosla Ventures, New Enterprise Associates, Alumni Ventures, Jolt Capital, Andreessen Horowitz (a16z), and Lux Capital are actively investing in Japanese startups, especially in AI and deep tech sectors.

That said, VC investments in 2025 declined by 8% compared to 2024, while investments from corporations and financial institutions increased by 28% and 18%, respectively.

With initiatives like the Startup Development Five-Year Plan, the Japanese government isn’t sitting on the sidelines, either, and that commitment remains firmly in place in 2026.

The Japan Investment Corporation has remained active. On November 1, 2025, JIC and JIC Capital established JIC PE2. It consists of the JIC PEF2 Limited Partnership, a JPY 600 billion private equity fund, and the JIC PEFJ2 Limited Partnership, a JPY 200 billion co-investment fund for large-scale projects, totaling JPY 800 billion.

SaaS, deep tech, and generative AI startups have been driving much of the fundraising activity. However, Japan’s traditional strengths in manufacturing, life sciences, and climate tech continue to show massive potential.

University startups are also gaining traction. The latest official data released by METI in 2025 shows that the number of university startups in Japan reached 6,220 as of October 2025, up from 5,074 in 2024.

Japan’s VC market is still small relative to its GDP. If Japan matched the VC-to-GDP ratio of leading startup nations, the market would be closer to JPY 8 trillion than JPY 761.3 billion.

Still, the exit environment is improving. Based on METI’s Startup M&A Guidance report, there were a total of 487 exit deals in Japan between 2020 and 2024. Out of these, 60% were M&A deals and 40% were IPOs.

Trending Industries

Japan’s known for its culture of innovation and cutting-edge technology.

So it’s no surprise SaaS (software as a service) startups have become popular here. Companies like Money Forward, SmartHR and Freee have shown that Japanese SaaS startups are formidable. Money Forward has been particularly innovative in its internal culture, recently implementing a comprehensive English transformation to scale its engineering organization globally.

However, the FinTech, life sciences, and healthcare industries have also been gaining popularity in recent years.

Recent initiatives by the Japanese government regarding the life sciences and healthcare industries have also made Japan a desirable place for foreign businesses. For instance, these initiatives allow foreign healthcare startups to receive extra support from the government in the form of an acceleration program.

Robotics and advanced manufacturing are two more industries that are on the rise in Japan. These industries have always been Japan’s strong suit, and the trend seems to be continuing. Thanks to the smart manufacturing initiatives introduced by the government, robotics and advanced manufacturing startups are thriving.

For instance, the Japan External Trade Organization (JETRO) helped make advanced manufacturing the biggest industry in Japan. This initiative allows factories that implement smart systems, sensors, and robotics to benefit from tax reductions.

Another popular sector for startups in Japan is, without a doubt, FinTech. Products and services that process online payments like PayPay are reaching new highs every year. The Japanese government even supports cryptocurrencies, which is a testament to their belief in FinTech innovation.

Top Japanese Startups in 2026

In Japan’s startup scene for 2026, these 10 companies raised the biggest rounds and are reshaping their respective industries.

Sakana AI

This AI powerhouse became the fastest company ever to reach unicorn status in Japan, hitting a JPY 227.7 billion valuation just over a year after its founding in July 2023. By November 2025, Sakana AI’s valuation was reported at JPY 432 billion.

Co-founded by former Google researchers David Ha and Llion Jones, along with Ren Ito, Sakana AI raised JPY 32 billion in Series A funding in 2024, followed by a JPY 32 billion Series B round in November 2025 that nearly doubled its valuation to JPY 400 billion, making it Japan's most valuable private startup.

What sets Sakana AI apart is its nature-inspired approach to AI. The company's name means "fish" in Japanese (さかな), representing collective intelligence. Rather than building massive models like OpenAI or Google, Sakana AI uses evolutionary algorithms to "breed" existing AI models together, creating domain-specific models that require far less computational power.

The company has attracted world-class backing from US venture firms, including New Enterprise Associates, Khosla Ventures, and Lux Capital, plus strategic investments from Japanese giants like MUFG, SMBC, Mizuho, and Nvidia. MUFG became Sakana AI's largest Japanese investor through the Series B round, deepening their partnership to implement AI solutions across Japanese industries.

In January 2026, Sakana AI's "ALE-Agent" became the first AI to win a major competitive programming contest, securing first place in the AtCoder Heuristic Contest against 804 human participants. The agent autonomously discovered novel algorithms using only about JPY 210,000 (USD 1,300) in compute costs, demonstrating AI's ability to match top human experts in complex problem-solving tasks.

SmartHR

As one of Japan’s few genuine unicorns, SmartHR has become integral for businesses navigating Japan’s notoriously complex labor laws.

Founded in 2013, the company has raised about JPY 58.7 billion across five funding rounds. In July 2024, it secured about JPY 21.4 billion in a Series E round led by Mukul Chawla and Olivia Steedman, and in November 2025, General Atlantic made a JPY 14.6 billion strategic minority investment through a share transfer from Coral Capital.

Japan’s Labor Standards Act strictly regulates everything from working conditions to overtime pay, and requires meticulous employee data tracking. To address this, SmartHR automates social insurance procedures, employee management, and talent development, making compliance dramatically easier.

The company exceeded JPY 20 billion in annual recurring revenue as of May 2025, serving 70,000 companies, including major enterprises like Nissin Holdings and NTT Data. With its latest funding, SmartHR plans to accelerate its growth by developing new solutions and making strategic acquisitions.

Tier IV

Tier IV is an autonomous-driving company and the original creator of Autoware: the world’s first all-in-one open-source autonomous-driving software stack hosted by the Autoware Foundation.

In 2024, the company raised JPY 7.5 billion, with strategic investments from major automakers, such as Isuzu Motors, Mitsubishi Corporation, and Suzuki.

What makes Tier IV unique is its commitment to open-source development, creating a platform that enables collaboration across the autonomous vehicle ecosystem.

In 2024, its AI Pilot system earned Japan’s first Level 4 certification for service on public roads (up to 35 km/h) and now powers an autonomous bus in Nagano Prefecture. The company also announced an end-to-end architecture for Level 4+ autonomy to be rolled out across 50 locations nationwide starting in early 2026.

Plus, in July 2025, it partnered with newmo to accelerate robotaxi commercialization in Japan.

In March 2026, Tier IV launched a hardware-agnostic Level 4 SAE Level 4 software stack built for use across different vehicle systems. The new stack combines Nvidia’s Alpamayo and Cosmos models to help vehicles deal with the rare road situations that still make full deployment hard.

The timing matters. Japan’s government has set a goal of 100 Level 4 autonomous service locations by fiscal 2027, which gives Tier IV a clear opening as cities and operators expand self-driving transport.

Turing

Turing is one of Japan’s most ambitious self-driving startups. Founded in August 2021 by CEO Issei Yamamoto, this Tokyo-based company is building AI for fully autonomous driving and has made its mission easy to remember with one line: “We Overtake Tesla.”

In November 2025, Turing closed a major Series A round of about JPY 15.3 billion, through a mix of equity and debt, including JPY 9.77 billion in equity from 1x non-participating preferred shares and JPY 5.5 billion in syndicated loans arranged by Mizuho Bank.

The round was co-led by JIC Venture Growth Investments and Global Brain, with support from GMO Internet Group, Denso, and other venture and corporate investors.

According to its company profile, Turing has raised JPY 27.2 billion in total funding and has 95 employees. In June 2026, the company started joint research with Subaru and Denso to help move fully autonomous driving into real cars and public-road tests.

WHILL

Founded in 2012, WHILL creates short-distance mobility devices like electric wheelchairs and scooters that help people move through diverse urban environments. The company also runs mobility services in large facilities where people need help covering short distances, like airports and amusement parks. Their goal? To make travel fun and smart for everyone. That focus has helped Whill grow from a product company into a big mobility platform with about 350 employees globally, with offices in Japan, the United States, Canada, Europe, China, and Taiwan.

In September 2018, the company raised $45 million (approximately JPY 5 billion at the time) in a round led by SBI Investment, Daiwa PI Partners, Daiwa Corporate Investment, and WHIZ Partners, with support from Endeavor Catalyst and others, bringing its total funding to about $80 million (approximately JPY 8.9 billion at the time).

In May 2022, WHILL also announced new funding led by Woven Capital, the growth fund tied to Toyota’s mobility group, to expand its service side of the business.

ispace

Founded in September 2010 by Takeshi Hakamada, ispace is one of Japan’s best-known space startups. As of March 31, 2025, the company had 317 employees and a capital stock of JPY 11.5 billion.

The company builds Moon landers and rovers to transport cargo to the Moon and gather data from the lunar surface while searching for water. They then plan to sell this data to governments, universities, research groups, and private companies.

Since its inception, ispace has raised about JPY 46.1 billion across four funding rounds, the latest being JPY 19.6 billion in October 2025, led by Development Bank of Japan, JIC Venture Growth Investments, Kurita Water Industries, and Takasago Thermal Engineering.

On top of that, ispace has won major public-sector support tied to lunar projects.

In October 2025, the company reached a contract with the Institute of Science Tokyo after being selected as a core partner for a lunar water sensing satellite project funded by Japan’s Space Strategy Fund, with a grant of about JPY 6.4 billion. In January 2026, it was selected for another Space Strategy Fund project focused on high-precision landing technology in the Moon’s polar regions for Mission 6, with funding of up to JPY 20 billion.

GITAI

Founded in July 2016 by Sho Nakanose, GITAI is a space robotics firm focused on automating physical work in space. The company develops robotic arms, satellite components, spacecraft systems, and service robots designed for tasks such as satellite servicing and building infrastructure on the Moon.

The company’s goal is to provide safe and affordable labor in space, with a long-term focus on work that could support future activity on the Moon and Mars.

GITAI has raised about JPY 10.2 billion across four rounds. Its latest funding came in November 2024, when it raised $15.5 million (approximately JPY 2.4 billion at the time), as part of its Series B Extension round, which followed $30 million (approximately JPY 4.6 billion at the time) raised in May 2023 and $15 million (approximately JPY 2.3 billion at the time) raised in August 2023.

Since moving its headquarters from Tokyo to Torrance (California) in late 2023, GITAI has expanded its production base in the US and continues to build technology for orbital work and future lunar construction.

LayerX

LayerX builds software that helps companies reduce the time they spend on office administration. Founded in August 2018, the Tokyo-based company is led by CEO Yoshinori Fukushima and CTO Yuki Matsumoto.

Its main product, Bakuraku, brings expenses, invoices, company cards, approvals, attendance, and receivables into one system. That focus is particularly relevant in Japan, where many businesses still rely on paper forms and spreadsheets for finance and back-office work.

In September 2025, LayerX raised JPY 16.1 billion in Series B funding, led by TCV. The company did not disclose its valuation, but said both the valuation and the size of the round ranked among the largest ever for a seven-year-old Japanese startup at the Series B stage.

Other investors included MUFG Bank, Mitsubishi UFJ Innovation Partners, JAFCO Group, Keyrock Capital, Coreline Ventures, and JP Investment. That round lifted total funding to JPY 30.9 billion.

LayerX says it’s on track to reach JPY 10 billion in annual recurring revenue faster than any software company in Japan has done before.

Astroscale

Astroscale is developing spacecraft designed to service other spacecraft in orbit. Headquartered in Japan, with teams in the United Kingdom, the United States, France, and Israel, the company provides services such as satellite inspection, refuelling, life-extension, and the removal of old hardware from orbit.

Its goal is to build a circular space economy, where operators can maintain and reuse assets instead of replacing them. It has received big funding over the years to turn that idea into a real business.

Astroscale had completed six funding rounds and raised JPY 52.8 billion before its latest financing. In May 2026, they announced a new U.S. raise of JPY 12.16 billion through a mix of convertible bonds and equity. That pushed total funding to more than JPY 60.16 billion, led by HULIC and Sky Perfect JSAT.

Astroscale said it plans to use JPY 7 billion to expand production facilities in Japan and the United Kingdom, another JPY 7 billion to build its LEXI-P spacecraft, and the rest for operating needs as it scales up future missions. For the fiscal year ending in April 2026, the company reported JPY 11.5 billion in project income, up from JPY 6.1 billion the previous year.

Rapidus

Rapidus is Japan’s flagship effort to bring leading-edge chip production back home. Founded in August 2022, the company develops, designs, manufactures, and sells advanced logic semiconductors and packaging services. Its mission is to rebuild part of Japan’s semiconductor base from design through production.

In February 2026, the company secured JPY 267.6 billion from Japan’s government and private-sector backers. That round included support from 32 companies such as Canon, Development Bank of Japan, Fujitsu, NTT, SoftBank, and Sony Group.

Then, in June 2026, Rapidus announced an additional JPY 150 billion investment from the Information-technology Promotion Agency of Japan, which brought total funding to JPY 424.95 billion.

In April 2026, Rapidus opened a new analysis center and launched Rapidus Chiplet Solutions. It plans to start mass production of next-generation logic chips in 2027.

Notable Japanese Startups from Previous Years

Here are several other startups worth watching, each continuing to grow after their first big breakout.

newmo

Founded in January 2024 by Naoki Aoyagi, former head of Mercari’s Japanese operations, newmo raised JPY 18.7 billion in its first year.

The company rapidly expanded by acquiring taxi businesses, giving it a fleet of over 1,000 taxis and making it the fifth-largest taxi operator in Osaka. However, newmo didn’t stop at traditional taxis. In July 2024, the company launched Japan-style ridesharing services in Osaka, followed by a vehicle leasing service for rideshare drivers.

newmo’s mission is to “enrich communities through mobility services,” and it’s expanding beyond Osaka with new bases in Karuizawa, Nagoya, and Okinawa. In 2025, newmo partnered with Tier IV to commercialize robotaxi services, positioning itself at the intersection of traditional mobility and cutting-edge autonomous vehicle technology.

ArkEdge Space

ArkEdge Space is riding Japan’s space strategy wave. In February 2025, it raised JPY 8 billion (Series B), led by Incubate Fund, with participation from JIC Venture Growth Investments, WiL, and other investors. This brought its total funding to JPY 10.7 billion

The company provides comprehensive solutions for microsatellite constellations, handling everything from planning and design to mass production and operations. ArkEdge Space has also developed a standard 6U satellite bus suited to IoT data collection, remote sensing, and maritime satellite communications.

In late 2024, JAXA chose ArkEdge for Space Strategy Fund projects on lunar navigation and faster satellite-constellation rollout.

The Space Strategy Fund runs for 10 years with about JPY 1 trillion planned; roughly JPY 600 billion has been budgeted so far.

Spiber

Spiber is reimagining materials science through biology, having raised JPY 7.9 billion in 2024 to scale its groundbreaking Brewed Protein technology. The company uses synthetic biology and microbial fermentation to “brew” new polymers that can replace everything from cashmere and silk to wool and even fur.

The process uses agricultural waste as feedstock, turning it into fermented polymers through a production method that slashes greenhouse gas emissions compared to traditional textile production. The resulting materials are completely bio-based, biodegradable, and cruelty-free.

Spiber’s technology has caught the eye of major global fashion, automotive, and industrial application brands looking for sustainable solutions. With a valuation of JPY 169.6 billion, Spiber holds the well-deserved title of unicorn.

Loglass

Loglass transforms how enterprises handle business planning and management. In 2024, they raised JPY 7.0 billion in Series A funding, attracting investments from Sequoia Heritage and MIT Investment Management Company.

Founded in 2019 with the mission of “Let’s create a good economy,” Loglass has a total funding exceeding JPY 10 billion.

The company’s flagship platform, Glass FP&A (Financial Planning & Analysis), helps enterprises streamline budgeting, forecasting, and personnel management through cloud-based solutions.

The platform serves companies across various sectors, including those listed on the Tokyo Stock Exchange Prime Market. Glass is focused on expanding its product lineup to over 20 offerings by 2027 and developing an AI-driven ERP platform. The company is also building a global engineering team with plans to establish development hubs in Vietnam and India.

The Many Hidden Unicorns of Japan

Japan’s unicorn count has always been a bit mysterious. Definitions differ (do IPOs still count?), and valuations aren’t always public. 

However, estimates hover around 10–11 as of late 2024/early 2025, plus a handful of likely “hidden” ones.

Focusing on the confirmed startups, Sakana AI became Japan’s latest unicorn on September 4, 2024, achieving a valuation of over JPY 200 billion (roughly USD 1.5 billion). That makes it the fastest Japanese company ever to reach unicorn status. 

Other notable examples include: 

• Mercari, the online marketplace for used goods, was Japan’s first unicorn back in 2016. 
• SmartHR reached unicorn status in 2021 with its enterprise HR platform. 
• Preferred Networks has been valued at over JPY 150 billion for its cross-industry deep learning applications. 
• Spiber makes the list with its biomaterials technology.

What’s interesting about Japan’s unicorns is that they tend to go public earlier than their Silicon Valley counterparts. The Tokyo Stock Exchange has relatively accessible IPO requirements, and companies often prefer the certainty of public markets over waiting for another private funding round. 

This means Japan’s unicorn count might actually be understated. To put it into perspective: Several companies that technically graduated from unicorn status via IPO would still be private unicorns if they’d been founded in the US.

There’s growing momentum, too. With increased interest from foreign VCs and continued government support, Japan’s unicorn count should continue to grow.

Location Is Key: Tokyo vs. Other Areas

Choosing the right location is crucial when you’re starting a business.

If you’re thinking about starting a business in Japan, you’re probably wondering if Tokyo is your only option. I’m here to tell you that it’s not.

It’s true that the majority of startups in Japan — especially those run by foreigners — start in Tokyo. But that doesn’t mean it’s the only option.

Japan is a vibrant country with distinct regions, and there’s more to it than just Tokyo. Other big cities like Fukuoka and Osaka also have a lot to offer. And these cities are home to plenty of successful startups too.

Let’s take a closer look at the startup scene in these three cities and see which industries are the most prominent in each one.

Startups in Tokyo

Tokyo isn’t just Japan’s biggest city — it’s the most populated city in the world. It’s a living, breathing megalopolis and it’s on its way to becoming a true tech hub.

Tokyo’s innovative startup ecosystem is valued at around $62 billion. Currently, there are over 1,200 startups in the city. The most prominent industries in Tokyo are robotics, SaaS, consumer services, and FinTech.

In addition to being a tech hub, Tokyo is becoming a smart city.

It’s an ever-growing innovation center with advanced, efficient systems. Sustainability and energy security are also top priorities in Tokyo. This helps make Tokyo a great place for startups.

Startups in Fukuoka

Fukuoka might not be as well-known as Tokyo, but it’s making strides toward becoming the Silicon Valley of Japan.

As far back as 2011, Fukuoka’s mayor announced that Fukuoka wanted to be the place for startups. It’s been going strong ever since, with the tech industry dominating the city’s startup ecosystem.

There’s a good reason Fukuoka is called “the startup city.” The tax rates for businesses have been lowered greatly compared to the other cities in Japan, which has made it the ideal place to start a business safely. Fukuoka was also chosen by the Japanese government to be the pilot city for their innovation center initiative. This initiative includes benefits like financial aid for renting spaces, tax reductions, and a startup visa.

Both these factors have impacted the city’s startup climate, turning it into a desirable place for startups that center around innovation. Nowadays, Fukuoka houses many startups that work in fields like data, hardware, and software related to the Internet of Things (IoT), the social services industry and more.

Startups in Osaka

Being one of Japan’s oldest economic hubs, Osaka is another great city where culture and tradition blend with innovation and modernity.

Osaka currently houses over 1,000 startups, with a good portion of these businesses operating in the life sciences industry. The city is also home to many public institutions. This allows for an interesting blend of the private and public sectors that coexist and collaborate.

This rare collaboration is one of Osaka’s greatest advantages. The government innovation initiative “J-Startup” also serves as an incubation center for hundreds of Osaka-based startups, all thanks to this collaboration.

Osaka hosted the World Expo in 2025, which emphasizes the city’s role as a place of innovation for both Japan and the world. This will be Osaka’s second time hosting the event since the 1970s, which further shows its rich history of innovation.

Visa Eligibility and Startup Visas

Starting a business in a foreign country has many challenges, and a visa is undoubtedly one of them.

Luckily, Japan offers a dedicated “startup visa” to foreigners who wish to start a business. The visa has been around since 2015, and it simplifies the visa process for prospective foreign business owners.

To get a startup visa, you need to present a business plan to one of the approved municipalities. Currently, the Japanese startup visa is only available in certain areas.

Here’s a complete list of the areas where you can apply for a startup visa as of 2026:

• Shibuya Tokyo
• Osaka City
• Kyoto Prefecture
• Fukuoka City
• Yokohama City
• Aichi Prefecture
• Kobe City
• Sendai City
• Hokkaido Prefecture
• Gifu Prefecture
• Ibaraki Prefecture
• Mie Prefecture
• Oita Prefecture
• Hamamatsu City
• Niigata Prefecture
• Hyogo Prefecture
• Kaga City
• Toyama Prefecture
• Tokyo
• Kumamoto City
• Okinawa Prefecture
• Narita City
• Hiroshima Prefecture
• Kitakyushu City
• Kanagawa Prefecture

After an examination of your business plan by the municipality, you’ll get approval. Then, you can apply to the immigration office and easily get your startup visa.

As we explained, this visa is specifically tailored for startups. If you’re looking for more information on other visa types and permanent residency, you can check out our recent post where we explain the various visa types Japan offers to foreigners.

While it’s true that Japan is a goldmine in terms of opportunities for startups, it has many established tech companies as well. You can check out our Japan company list to get an overview of these companies and even explore new job opportunities.

The startup visa makes it easier for foreign founders to test the waters in Japan. And right now, the country’s startup scene offers exactly the kind of opportunities those founders are looking for.

What’s Next for Japanese Startups

Japan’s startup scene is bigger and more diverse than ever before.

According to Speeda’s Japan Startup Finance 2025 report, startups in Japan raised JPY 761.3 billion, excluding debt, which is close to the JPY 779.3 billion tracked a year earlier. The number of startups that raised funds also dropped slightly from 2,869 in 2024 to 2,700 in 2025, but this isn’t a cause for concern.

The main reason why funding slowed down a bit is because it became more selective, as investors now want founders to prove more before they could close a round.

Since the government put the Startup Development Five-year Plan in place in 2022, it has used policy support to make it easier for startups to grow.

METI estimates that startups contribute to the economy by JPY 13.66 trillion, which equals 2% of Japan’s nominal GDP. When indirect effects are included, that total rises to JPY 25.69 trillion, or 4% of nominal GDP. Startups support 591,000 jobs and generate JPY 3.92 trillion in income.

All of this shows us that startups play a real part in Japan’s economic growth. The main issue now is whether Japan can turn this larger base into more companies that stay alive, grow faster, and compete outside the home market.

The next phase will depend on where growth happens and what kind of companies lead it.

Japan’s startup scene still leans too hard on Tokyo, but according to Keidanren, it needs several strong centers that will compete, share talent, and keep raising the bar for each other.

The kind of startups that grow from here may matter just as much. In the second half of the government’s Startup Development Five-year Plan, the companies that will receive the most funding are those in the deep tech and GX (Green Transformation) sectors, as well as university startups.

For those who want to work in Japan, the opportunities are there. And as Japan continues to push for more globally minded startups, foreign professionals will become an integral part of how the next generation of Japanese startups grows.