SUMMARY
Over 50 Japanese investors are actively investing in the Indian startup ecosystem
Japan is also inviting Indian startups to go for IPO on the Tokyo Stock Exchange
Japanese government's JETRO and Invest India came together to facilitate networking between VCs and startups
Following up on the promises to collaborate and strengthen the startup ecosystem in India and Japan, Japanese investors have been some of the most active participants in the investment landscape. Not only have investors backed Indian startups with mega funding rounds, but have shown a keen interest in being a partner for Indian startups and the tech ecosystem. And it’s not just about the SoftBank Vision Fund.
The Japan External Trade Organisation (JETRO), Invest India and NASSCOM came together on Wednesday (January 22) to host a conference in Mumbai to enable discussions and explore opportunities to solidify the partnership of Indian startups, tech businesses and their Japanese counterparts.
JETRO, NASSCOM and Invest India said the collaborations between Indian and Japanese companies blends the strengths of both worlds with India bringing solid software skills and Japan supporting it with cutting-edge hardware and manufacturing.
Nakajo Kazuya, executive vice president, JETRO told Inc42 that the partnership will enable collaborations for Indian startups to expand into Japan, co-creating products and opening up funding opportunities.
Addressing the audience consisting of investors and startups, the chairman of Japan Venture Capital Association, Shinzo Nakano, explained that Japan presents wide opportunities for Indian startups in terms of tech adoption. Nakano also highlighted that many VCs, investors, and institutions are looking to promote Japan-India open innovation and create great business opportunities.
JETRO, which is a Japanese government-related organisation exploring trade opportunities, claims to have supported over 20K projects since 2003, out of which there were two thousand cases of successful investment by foreign companies with its support.
Nakano and Kazuya emphasised about the possibilities of open innovation support between the two countries. “There is an increasing demand for open innovation by Japanese companies where Indian counterparts can be a partner,” Nakano told Inc42.
Indo-Japan Startup Partnerships
Among the investors at the event were the likes of Sugiyama Yoriyuki, general manager, Tokyo Stock Exchange; Brij Bhasin, general partner, Rebright Partners and Kuwahara Hidemi, deputy general manager, Sojitz India.
Yoriyuki talked about the listing of Indian startups on the Tokyo Stock Exchange. He highlighted that Tokyo has better listing opportunities than Singapore and Malaysia. The exchange has a special programme for emerging businesses called MOTHERS. He also showcased that MOTHERS board on the stock exchange has witnessed 63 IPOs with a market cap of $137 Mn while the average IPO amount was $16 Mn.
In September 2019, Japan’s Ministry of Economy, Trade and Industry (METI) announced that startups in Asia can now list themselves on the Tokyo Stock Exchange (TSE). The ADX would support the efforts of Asian startups to have their initial public offerings (IPO) in the TSE, which is the world’s third-largest and Asia’s largest stock exchange by market cap of its listed companies.
Further, Rebright’s Bhasin told Inc42 that enabling the connection between India and Japan through limited partners in Japan will be one of the primary focus areas for Rebright’s fund. He also emphasised that over the past few years, corporate venture capital funds have become increasingly more active in India.
As per DataLabs by Inc42’s Japanese Investors in India report, there are over 50+ active Japanese startup investors in India who have funded 105 Indian startups and 12 unicorns across 136+ funding deals.
The DataLabs report added that the value of trade from Japan to India stood at ¥1,236 Bn ($11.62 Bn) in 2018, compared to ¥585 Bn ($5.50 Bn) worth of trade from India to Japan. The value of trade from Japan to India is growing at a rate of 4%, whereas in the case of India to Japan the recorded growth rate is approximately 1%.
India’s ties with Japan have been ever-cordial with a long and firm relationship based on strong socio-economic support from both countries. The discussions also highlighted that Japanese investors are slow in terms of investment but prefer to go with long-term investments and associations with startups.
Two Indian startups— Vymo and Uncanny Vision— talked about their association with Japan and how they built their business in the country. Uncanny Vision’s COO Deepa J said that for B2B startups, large enterprises in Japan are huge opportunities due to shortage of labour as well as dedicated enterprise tech solutions.
In terms of challenges, she added that the company faces issues with language, culture as well as longer evaluation by the large enterprises. She also advised that while doing business with Japanese customers, it is better to keep pictorial presentations instead of large text, scheduled meetings and punctuality.
