The data and key findings from the JVCA/GCV survey reveal an open, innovation-oriented community.
Japan Venture Capital Association (JVCA) chairman Soichi Kariyazono explained the progress of the country’s corporate venturing ecosystem, which has ramped up in the past four years, at the Global Corporate Symposium held in London in May.
Kariyazono presented insights from a regional survey JVCA conducted with GCV Analytics. The data from the survey formed the basis of a report released at the Japan Ministry for the Economy, Trade and Investment comparing local and international perspectives.
Kariyazono said JVCA’s membership has doubled in the past four years because the Japanese ecosystem experienced a rapid increase in corporate venture capital (CVC) activities, adding: “Traditional industries such as railway and banking are aiming to change.”
Japanese startup funding has registered a major increase in recent years. Venture capital investors currently account for about a third of the total investment in the country while 50% comes from corporate investors and their subsidiaries.
The country’s innovation ecosystem has in recent years advanced from an institutional VC-dominated arena to an open innovation-oriented community.
Japanese corporates began committing to corporate venturing in the 1990’s and early 2000’s, and Mawson asked Kariyazono whether he considered the current effort to be sustainable.
Kariyazono replied: “In the 90’s and 2000’s they did not touch the core business but now it is different. Corporates want to change; they cannot continue in the status quo,” adding that corporates did not only seek financial returns but also a core change in their business.
Mawson asked whether a corporate would be likely to discontinue CVC activities in three to four years’ time if financial returns were not pronounced. Kariyazono confirmed that it was a concern for the Japan-based corporate venturers that their investments would not generate short-term returns.
Kariyazono finished by expressing optimism about the development of Japanese corporate venturing.
“Only three to four years ago, the Japanese CVC community was very closed, but now corporates are opening up with startups, other industry leaders and global leaders,” he said. “As the CVC community in Japan is opening up, corporates also want to follow their example.”
