"Can Tokyo Become Japan's Silicon Valley?: Views from the VC Trenches in Japan.”

© 2016 NTT DOCOMO, INC. All rights reserved.
Mick Etoh
@mickbean, 9/15/2016
NTT DOCOMO
1
"Can Tokyo Become Japan's Silicon Valley?:
Views from the VC Trenches in Japan.”

2
http://www.slideshare.net/apglo/presentation-for-decoded-fashion

Top Venture Capital
3

Cooperate Venture Capital
4
http://www.slideshare.net/apglo/presentation-for-decoded-fashion
terminated

5
50 : 5 : 1
US Annual ﬁnancing to VC-backed companies(start-ups) = $57 and $72B in 2014 and 2015
while Japanese VC’s ﬁnancing still remained about $1B(2015).

6
Source: NVCA YEARBOOK 2015Source: Venture Hakusho 2015
（00’s M¥）（00’s M$）
2500
3000
3500
4000
4500
150
237.5
325
412.5
500
2010 2011 2012 2013 2014
Total Investments per Year (00s M$) Number of Investments
4361
4238
39644039
3667
493.1
300.6275.8298.8
234.4
366736673667
403940394039 39643964
423842384238
436143614361
0
1000
2000
3000
4000
0
500
1000
1500
2000
2007 2008 2009 2010 2011 2012 2013 2014
Total Investments per Year (00s M¥)
Number of Investments
9691000
824
1017915991
1294
2579
1171
1818
1026
12401132
875
1366
1993
25792579257925792579257925792579
129412941294129412941294129412941294
991991875991875991991 915915915 10171017101710171017
824824824
1000100010001000 969969969
Changes in VC Investment in US and Japan

7
0
300
600
900
1200
2013 2014
588.6
381.9
176.3
158.4
167.5
117.1
159.5114.5
Products/Services
Industrial/Energy/Other
Biotech/Medical/ Healthcare
IT-related
VC Investments by Sector

8
Venture Capital Financing in the US and Japan
17%
7%
17%
2%2%2%2%
10%
6% 2%
4%
8%
25%
Public Pension Funds
Corporate Pension Funds
Bank/Financial Services
Corporations
Insurance Companies
Endowments/Foundations
Wealthy Investors/Feeder Funds
GP Contribution
FOF
Sovereign Wealth Funds
Other
7%
17%Corporations
Bank/Financial Services
Insurance Companies
Other VCs/FOF
Governmental/Regional Organizations
Unlimited Liability Partners/Managing Partners
Foreign
Other Domestic
Individual/Family
Stock Brokerage Firms
Sources for U.S. VC Fundraising
Venture Capital Fund Commitments (2012/2013)

9
In Million of US$
Amount of VC investment
Amount of VC investment
ratio to GDP
US Fr
a
nc
e
UK Ger
man
y
Jap
an
A
u
st
ra
li
a
Can
ada
Swit
zerl
and
Swe
den
Isra
el
Bel
giu
m
Sou
th
Kor
ea
Nor
way
Holl
and
Spa
in
Den
mar
k
Finl
and
Irela
nd
Aus
tria
Itali
a
Port
ugal
Cze
ch
Rep
ubli
c
Gre
ek
Est
onia
Lux
emb
our
g
Slov
akia
Pol
and
Hun
gary
VC Investments by Country

10
Innovation Ecosystem in EU
International Journal of Technology Management vol. 66, num. 2/3
key individuals are in blue, companies in red and
ﬁnancial ﬁrms in green.

11
Can Tokyo become Japan’s
Silicon Valley?

12
No.

12
Startups in Tokyo has two options:
•Come to the Bay Area, or
•Stay in Tokyo but focus the unique product.
No.

13
Market
VC
Ecosystem
Talent
Source:2016 Silicon Valley Index
Interlock of investment, talent, and market creates
an unsurmountable barrier for others.

14https://www.cbinsights.com/blog/increasingly-crowded-unicorn-club/
The Crowded Unicorn($1B+) Club (as of August, 2016)
171

15Source: SparkLabs Global Ventures
Start-up/VC Ecosystem
1. Funding & Exits
2. Engineering Talent
3. Active Mentoring
4. Tech Infrastructure
5. Startup Culture
6. Legal & Policy Infrastructure
7. Economic Foundation
8. Government Policy & Program

16
6. Boston
7. LA
8. Beijing
9. London
10. Berlin
Source: SparkLabs Global Ventures
10 Hottest start-up Ecosystem
1. Silicon Valley
2. Stockholm
3. Tel Aviv
4. NY
5. Seoul

17
India China Japan Israel Bay Area
Market size " ◎ ! ! ◎
Language " △ ! △ ◎
Regulation/
Market fairness
△ △ △ △ "
Excellence or
Uniqueness of
Talent
" " △ " "
Life/Weather* ! ! △ △？ ◎
Overall △ △ ! △ ◎
*Don’t laugh. It DOES matter.
India and China receive large amounts of VC money due to their market size. However, there are only a few
companies in those countries that succeed globally.
Which countries are best for startups?
Can Tokyo become Japan’s Silicon Valley?

18
Startup Nation
Advantage
Strong relationship to Military and Defense
Industry (AI, Communication, Security, Devices)
Famous Startups
Waze, Viber, Fiverr
VC circumstances
20-30 VCs, 4000-5000 startups, 6B exit in 2015,
Chinese-backed VCs(40%?)

19
London as Gateway
Advantage
London as Gateway to EU and US，Fin Tech demands
Famous Startups
Shazam, Powa, Skyscanner
VC circumstances
>1000 Fin Tech companies with GBP20B size revenue
3200-5400 start ups in UK
Tech City in London

20
The Nordic countries
Advantage
Social Demands by Low Carbon, Medical Care,
Digital Government.
Famous Startups
Spotify, Supercell
VC circumstances
Stockholm Innovation & Growth(STING),
Governmental Agency for Innovation Systems
- VINNOVA

21
Tokyo & Japan
Advantage
Animation, Media Contents(e.g., PockemonGo),
Gaming, Bio & Devices
Famous Startups
Gumi, Mercari, Cyberdyne, Euglena
VC circumstances
Rising CVC money into AI, IoT, Robotics, etc.
$1B (2015) -> $1.6B (2016)

22
Gaming/Net Media
Biotechnology, Device

23
First Nippon Venture Awards(2015)First Nippon Venture Awards
Prime Minister’s Award
euglena Co., Ltd.
METI Minister’s Awards
Cyberdyne Inc. and
Diawa House Industry Co., Ltd.
METI Minister’s Award
(Female Entrepreneur) Coiney Inc
Special Jury Award
(Encouragement of Regional Economies) Spiber Inc.
Special Jury Award
(Work-Style Innovation) CrowdWorks Inc.

24
Second Nippon Venture Awards(2016)
Special Jury Award
(Intrapreneur) Sony Corporation
Prime Minister’s Award PeptiDream Inc.
METI Minister’s Awards
ZMP Inc. DeNA Co., Ltd. Sony Mobile Communications Inc.
METI Minister’s Award
(Female Entrepreneur) Genequest Inc.
Special Jury Award
(Global Expansion) Mercari, Inc.
Special Jury Award
(Resolution of Social Challenges)
SuRaLa Net Co., Ltd.

25
M&AIPO &
Partnership
Tokyo Stock Exchange:the Mothers
(Market of the high-growth and
emerging stocks) section for high-
growth startup companies. See also
JASDAQ.
Market Capitalization > $10 Milion
average: $26.5M

26
http://www.jpx.co.jp/english/derivatives/products/domestic/mothers-futures/index.html

27
Way Forward

28
Innovation Engine of Bay Area
Talent
Market
VC
Ecosystem

29
Innovation Engine of China
Manufacturing
Market
Manufacturing
Production
Ecosystem
suggested by H.Tamura@Re:Public

30
Shenzhen Tianjin

31
Innovation Engine of the Nordic Countries
Society
Citizen Experiments

32
credit to H.Tamura@Re:Public
IKEA@Denmark

33
Innovation Engine of Israel(Joking Version)
Hungry
Drought Resilience

34
Innovation Engine of Tokyo
Skill
Urban
Infra-
structure
Quality
Conscious
Market

36https://www.youtube.com/watch?v=FVAkuBSkaw0

37
A Possible Innovation Engine of Tokyo
Partnership
without M&A
Steady
Business Model
Engineering

38

39
https://www.youtube.com/watch?v=w7NgejZMSsA

40
Another Possible Innovation Engine of Tokyo
Small-Scale Manufacturing
New IoT
Market
Small-Scale ManufacturingSmall-Scale Manufacturing
Networked
Production
Ecosystem

41
Hardware Startups in IoT Era

42
Hardware Startup Accelerators
Creation
From Prototyping
to Mass Production
Shenzhen
San Francisco

43
Source：makers、Micro-Production in Japan, IBM
+Large scale production
+Requires high management skills
-High RISKS;
-Language barrier
-Quality management
-Exchange disadvantage
-Higher Labor costs
-Increasing Tax
EMS companies : High tech subcontractors
-have sustained Japanese manufacturing
-decreasing orders from existing makers
Middle size EMS accepts from 100 lots of manufacturing
1,000
10,000100
Q
31
thousand
17
thousand
9
thousand

44
China
Japan
Unit Labor Costs (i.e., normalized payment by GDP)
http://www.nikkei.com/article/
DGXLASDZ05H7B_V01C15A2MM8000/
Labor Cost increase:10%/year
Month Payment $566/month in Beijing, $474/month in Shanghai
Japan > $2000/month

45
39 Meisters:
Networked
Production
Ecosystem

46
!"

47

48
Less spent on essentials, more for “luxuries” or “unique ones”
• http://www.scootman.bike/
• https://39meister.jp/selection/selection005/

49
• IP:
Japanese companies share 40% of top 100 patent owners worldwide. (Thomson
Reuters).
As such, Japan has the underlying strength in the production innovation.
• Fund:
Japanese private ﬁnancial asset totals 1,700 tril. ($17 tril) and over 50% is held
in the bank savings and cash. – can we unlock the funds to more risk asset? It
is worth noting that more than half of those assets that held tightly in the
bank savings account and cash.
• VC $80B worldwide, there is a big gap in size for risk money.
Can we unlock the funds towards the riskier asset such as venture investment?
Potentially, the funding is not an issue for Japan’s Start-up, if only we can
change the risk-averse investment policy and mentality.
Innovation only happens where the money is.

Take Aways
•Startups in Tokyo have two options: 1. Come to Bay
Area, and 2. Stay there for own unique products.
•VC ﬁnancing is raising from $1B(2015) -> $1.6B.
•Hot Trends:
–Connecting tech start-ups to large companies, and
–Hardware startups in IoT Segment.
50

"Can Tokyo Become Japan's Silicon Valley?: Views from the VC Trenches in Japan.”

Recommandé

Recommandé

Contenu connexe

Plus de Osaka University

Plus de Osaka University (20)

Dernier

Dernier (20)

"Can Tokyo Become Japan's Silicon Valley?: Views from the VC Trenches in Japan.”