In 2023, venture capital (VC) investment in domestic companies in Japan amounted to approximately 212.1 billion Japanese yen. The amount of investments made by Japanese venture capital firms declined from a decade high of 255 billion yen in the previous year.
Domestic VC investment
Venture capital investment is a type of private equity investment in startup companies with high-growth potential that is associated with a high degree of risk. Relative to the size of Japan’s economy and compared to other large economies like the United States, the Japanese venture capital market can be considered small. However, given a maturing startup ecosystem and government efforts to promote regional startup hubs throughout Japan, it has seen a general upward trend in recent years. Large corporations increasingly engage in startup investment to explore new business opportunities and capitalize on innovations, resulting in an increase in corporate venture capital (CVC) in recent years.
Overseas VC investment
The largest share of investment made by Japanese VC firms in 2023 was directed at domestic companies. Overseas VC funding accounted for around a quarter of investments. A look at the regional distribution of VC investment in the fourth quarter of 2023 revealed that Asia received the largest share of funding, followed by North America and Europe.
