Reported by Isao Tokuhashi and Jennifer A. Hoff (My Eyes Tokyo)
Mail to: email@example.com
In the past, Japan could have been considered an “underdeveloped country” in terms of entrepreneurship, with only a small population of entrepreneurs and an environment that was not built to foster it. Since then however, both the national and local governments as well as the private sector have been working together to create a more fertile landscape for startups, which has been increasing entrepreneurial awareness. As a result now, even foreign investors have started to take an interest in Japan-born startup companies, and it is no longer unusual to see large-scale fundraising projects associated with revenues exceeding 1 billion Japanese yen (approximately 8 million USD).
As if to further fuel Japan’s entrepreneurial fervor, Japanese Prime Minister Fumio Kishida has dubbed 2022 the “first year of the startup creation era.”
Autograph and message written by Fumio Kishida. The message says, “The first year of the startup creation era”.
*Taken at CIC Tokyo
In March 2022, the Japan Business Federation (“keidanren”) released their proposal for the action they would take to help energize the startup atmosphere in Japan. They set ambitious goals, including increasing the number of unicorns from about 10 at present to 100 by 2027, as well as for increasing the number of startups to 100,000. In addition, they proposed the creation of the “Startup Agency”, a cross-ministry control tower for startup development, to the government.
The beginning of “startup fever” this year isn’t just taking place in Tokyo. Hiroshima Prefecture has announced its launch of the “Hiroshima Unicorn 10”.
“We hope that people from not only within the prefecture, but also from all over Japan and the world will participate in the project,” says Governor Hidehiko Yuzaki.
While the entirety of Japan is now at its height of enthusiasm for nurturing startups, Kobe City, now becoming the leading center of startup development in Japan, has just held “KOBE STARTUP WEEK” in Tokyo and Kobe in March 2022. Approximately 60 companies that have received support from Kobe City’s startup programs and work on local, national, and global issues such as life science, GovTech, and SDGs made pitches and participated in the panel discussions that took place during the week of events, partially broadcast live over Zoom.
This article will cover two events of particular interest, called “SESSA Startup Pitch” and “KIKKAKE – KOBE LIFE SCIENCE STARTUP NIGHT” held in Tokyo. First, we will report on “SESSA Startup Pitch,” a truly global event with a multinational and multicultural atmosphere.
*Sessa (切磋): Studying hard, improving one’s morals, and making every effort to do well.
*Kikkake (きっかけ): catalyst, trigger, springboard
SESSA Startup Pitch
2022.3.16 @ TRUNK (HOTEL)
The City of Kobe has co-hosted the “500 Founder Academy in partnership with KOBE” with 500 Global, one of the venture capital firms based in Silicon Valley, and has also hosted the “Global Mentorship Program,” in which entrepreneurs were accompanied by prominent businesspeople and investors active in Japan and abroad. The picks of the 200 companies that participated in the program gathered in Shibuya, a sacred place for startups in Japan.
Kizo Hisamoto, the mayor of Kobe City who has spearheaded the city’s startup support projects, offered his remarks to kick off the event day:
“The City of Kobe has been collaborating with and supporting startups from the perspective of working together to solve our social issues. Kobe’s government is changing now. We have planned the demo day with the hope that the future of startups will also change together with us.”
The following companies engaged in a heated pitch battle while a panel of judges consisting of Japan’s business and investment moguls (including Oki Matsumoto, founder and CEO of Monex Group, and also known as an outsider director of Mastercard) explored how the visions they had could be monetized and scaled:
☆Aironworks: Cyber security training tool development (Japan-Israel mixed team) *Won the Audience Award and an Award of Excellence
☆〇Cold Storage Japan: Building a next-generation platform for refrigerated and frozen logistics
〇fixU: Development of tools to support unmanned and labor-saving store operations *Won the Highest Award
▲Hello xLAB: Building a matchmaking platform for professionals
〇Moff: Development of IoT rehabilitation support service for nursing homes
Pafit：Development of corporate data collection and analysis support service specializing in Shopify
▲Smart Panel Technologies: Development of architectural facade panels inspired by the biomimicry of human skin
▲Smart Tissues 3D SpA: Development of antibacterial bio-ink that enables 3D printing of human biological tissues and organs *Won an Award of Excellence
〇T-ICU: A team of intensive care specialists which provides medical support to doctors remotely
☆: Company whose representative is from Kobe
▲: Company whose representative is from abroad
〇: Company with offices in Kobe
Entrepreneurs from abroad shared with us how Kobe City helped them develop their businesses, along with the reasons for why they chose Japan as their base of operations.
Albert Abut, CTO of Smart Panel Technologies
“I have been living in Japan for 35 years now and have my own architectural firm Albert Abut Architecture, with offices in Tokyo and Hong Kong and branches in Hanoi and Paris.
But Smart Panel is a completely different company from the architectural firm I run. It’s a start-up born from my years of experience and more than 10 years of research on biomimicry and human anatomy. I have held conferences in the U.S., France, the UAE, Japan, Singapore, Korea, … to share the Smart Panel technology.
The City of Kobe has introduced us to various mentors and provided guidance on how to pitch and improve our presentation skills. We are also very grateful for the introductions to people who are at the forefront of the industry. We believe that the Kobe program is very beneficial for startup engineers like us and will be a catalyst for our development. During my pitch at today’s event I proposed to the Mayor of Kobe that if we are able to raise funds in Japan through the support of Kobe City, we will open an office in Kobe as well as in Tokyo.”
Gustavo Rosales, Co-founder of Smart Tissues 3D SpA
“Our CEO and I originally came to Japan as scholarship students for graduate school. After we finished our PhDs, we first created a company in Chile. But this year, we are finally establishing a company in Japan.
Being in Japan is a really important point for us. We are in Japan because the Japanese market is very big for our products. Japan is also the center of iPS cell research. And there are a lot of pharmaceutical companies in Japan. I think we are in a great place with a lot of potential.
Our techniques and projects were promoted in Japan with support from Kyoto and Kobe. In particular, Kobe organized individual and group mentoring meetings with experienced Japanese and global investors. As a result, we were able to validate our business, expand our network, and join the Japanese startup community. Eventually, we would like to become an international company with all of their support.”
Dwayne Grech, CEO of Hello xLAB
*Dwayne Grech’s audio interview in English
“I’d only just arrived at little over a year ago to Japan. And it was researching the startups and foreigners in Japan and trying to kind of get connections to get an advantage and understand the Japanese market. And through many conversations with people that I know in Tokyo, because I was already in Osaka, they told me to go and talk to Josh Flannery, who is an Australian who’s helping the Kobe Startup Hub, which is how I’m here today. […] Joshua Flannery, he also runs a consultancy company called “Innovation Dojo Japan”. So he has been sort of a director to help foster entrepreneurs outside of Tokyo, so helping to support the Hyogo and Kansai regions, respectively. So it’s just through conversations and introductions that I really did come across Kobe and Kobe City, and they’ve been very instrumental in supporting my business and my vision to create a networking platform. And by connecting me with other professionals and mentors and opportunities to get ideas, pitch ideas, and practice, I feel confidence today because of Kobe City and the Kobe Startup Hub.”
“So usually you’re based in Osaka? So how did you find it? How did you get to Osaka? I’m not sure that it’s famous for startups.”
“No, it’s not. (laughs) That’s right. So, my family and I—with my wife, who’s Japanese, and our daughter—we moved to Japan from the U.S. because of COVID. I’m already 15 years in my career in UX design and I said, because things were very complicated in the U.S., it was an opportunity for us of try something new and different. I always wanted to start a company in Japan, I thought maybe this is probably the good time to do it. I don’t know. It sounds like a crazy idea.
“So, because she’s from the Nara area, it was convenient for us to come to Osaka, only because of family being there. But honestly, Osaka was never going to be our final destination. We were going to move to Tokyo and start the business there, like everybody else does. But when we got here, it was at the height of COVID in Japan, so getting to Tokyo from Osaka was basically impossible. So with Osaka pretty much at my doorstep, I thought I’d go and investigate the city to see what that’s all about. And I quickly discovered a startup community that was growing. It was very innovative, it was very young, it was very diverse… And nobody knew about it. It was kind of like Kansai’s secret. And I got connected with Osaka City and a few small startups. Then I quickly really got into the community itself. That’s how I then I eventually met up with the Kobe community which they were kind of sharing resources with, and doing things together with, which I really liked. So it just took off from there.”
“How much did Kobe City help out your business?”
“Kobe City has really helped out by connecting me with different mentors in Hyogo and Kansai. They’ve given me opportunities to share my idea and really sort of evolve it. It’s literally a community, a community I can trust and I can connect with as opposed to trying to do this by myself. So I found people like me, which was great. And Kobe’s so short to travel to from Osaka, so it’s very convenient for me to do a day trip to Kobe and come back. It’s just basically another neighborhood for me to go to, which is really great, so I don’t really look at it as two different cities, but just one larger community. And part of my effort now is to help promotes startups and entrepreneurs outside of Tokyo, for foreign businesses and startups to come in and invest.”
“Like including Osaka and Kobe.”
“Right. And with the World Expo coming up in a few years in Osaka, this is a great opportunity now to start sharing the news that Kobe and Osaka are entrepreneurial ready—they’re innovative, they’re design centric and I think it’s a great opportunity for startups to come in and call home.”
“Osaka is holding a huge event soon.”
“That’s right. That’s a shared effort too.”
“Thank you very much.”
We also talked to one of the key people who leads the Kobe City startup support, Taku Takeda, the Director of the New Business Promotion Division at Kobe City Government:
“We’d like to spread the word on how there are so many great startup companies coming to life in Kobe. Recently the number of startups that we have supported has increased, such that it’s impossible to introduce them all in a single day. That’s why we’ve launched “KOBE STARTUP WEEK”. This series of events is like a Japanese version of SXSW (South By Southwest*), with a focus on the medical industry, startups, and SDGs.
Now that Kobe City has accumulated expertise in startup support, the joint program with 500 Global aims to support 100 companies a year—up from 20 companies a year—and the Global Mentorship Program aims to support 200 companies a year. We will keep implementing more aggressive support measures so that people have a new impression of just how supportive Kobe is of startups.”
*South By Southwest: One of the world’s largest conferences and festivals held annually in March in Texas, which showcases prominent startups from around the world.
KIKKAKE – KOBE LIFE SCIENCE STARTUP NIGHT
Kobe City held another event called “KIKKAKE – KOBE LIFE SCIENCE STARTUP NIGHT” in Tokyo one day before SESSA Startup Pitch. Life science startups based in Kobe, home to Japan’s largest biomedical cluster called Kobe Biomedical Innovation Cluster (KBIC), business and medical professionals, all gathered at the event.
KBIC, initially called the Kobe Medical Industry Development Project, was created in 1998 as a reconstruction project after the Great Hanshin-Awaji Earthquake. The project aimed to create Japan’s first life science cluster to revitalize Kobe by ushering in a new industry, at a time when the area was suffering from businesses relocating themselves away from there. Approximately 380 medical-related companies and organizations from Japan and abroad, including small and medium enterprises, startups, and major pharmaceutical companies, have established operations in the area. A major difference between KBIC and other medical clusters in other cities is that a huge city-run hospital, Kobe City Medical Center General Hospital, is located in the area.
KBIC, which has grown to become one of the largest biomedical clusters in Japan, and the city of Kobe, which has nurtured it, introduces their efforts to support around 70 life science startups that aim to commercialize basic research and conduct clinical trials through investor support, inviting them in to deliver pitches and participate in panel discussions.
Panel discussion 1: Trends and Prospects of Japanese Startups from Academia
Panelists (from photo left to right):
Moderator: Yoshiaki Ishii, Director of Industrial Finance Startup and New Business Promotion Office, Economic and Industrial Policy Bureau, Ministry of Economy, Trade and Industry (METI)
Takafumi Yamamoto, President and Representative Director of TODAI TLO
Takayuki Sakai, CEO of Kobe University Innovation
Masafumi Mieno, Executive Director of Foundation for Biomedical Research and Innovation at Kobe (FBRI)
Life Science Startup Pitch Event
NATiAS: Production and sales of nucleic acid APIs (active pharmaceutical ingredients) for pharmaceutical applications
PROGENICYTE JAPAN: Development of Regenerative Inducing Drugs for Alzheimer’s and Parkinson’s Disease
Knowledge Palette: Research and development of drug discovery and high-quality regenerative medicine
Restore Vision: Development of vision-regenerating gene therapies
CellFiber: Development of cell mass production technology for cell therapy applications based on the world’s first “cell fiber” technology as a core technology
NextGeM: Development of next-generation medical technologies using stem cells, AI, and bioinformatics
Panel discussion 2: Secrets to the successful collaborations of startups and business companies in Kobe
Panelists (from photo left to right):
Moderator: Shunichi Takahashi, Head of Bayer Open Innovation Center Japan
Hisato Doi, Representative Director and President of Evec
Tomokazu Yoshida, Senior Executive Officer and Managing Director of Sysmex *Joined online
Yosuke Suzuki, CFO of NATiAS
Neung Suh, Co-founder and Co Representative Director of PROGENICYTE JAPAN
In the third panel discussion, “Possibilities created by having bases in Tokyo and Kobe”, startups that had established their offices and R&D centers both in the Kobe cluster and in Tokyo shared their love for Kobe.
Panelists (from photo left to right):
Moderator: Taruho Kuroda, Senior Director of R&D APAC Hub, LEO Pharma
Masakazu Fukuda, Co-founder, Representative Director and CTO of Knowledge Palette
Hikaru Miyazaki, COO of Restore Vision
Yu Yanagisawa, Representative Director and CEO of CellFiber
Masakazu Nakajima, CEO of NextGeM
Tadaaki Hanatani, Acting Director of Center for Cluster Development and Coordination (CCD) at Foundation for Biomedical Research and Innovation at Kobe (FBRI)
Hikaru Miyazaki, Restore Vision
“Once we tell FBRI* and the Kobe City our requests, they share those with various people.”
*FBRI is the organization that promotes and facilitates collaboration and integration among industrial, governmental, academic, and medical sectors.
“We were unable to connect with other companies in the same industry due to the pandemic and were eager for the opportunity to do so. Then KBIC took the lead in organizing a roundtable discussion with them the other day. We would like to see more meet-up opportunities in the future.”
Masakazu Nakajima, NextGeM
“Before I established our company, I visited places all over Japan and found that Kobe was the only city at the time that had an incubator like FBRI. They were very accommodating to our inquiries, and they met my requests when I asked them to introduce me to all the key people in the area.”
“When I was working for a trading company, and I told people from overseas that I was from Kobe, nobody said they knew anything about the city. But they would get really excited and recognized the name as soon as I told them that it’s where Kobe beef comes from. If we tell venture capitalists from overseas, “You can eat all the Kobe beef that you want for a whole year if you come visit us in Kobe!”, I think they might actually come just to do that. This is something that no other city can say they can do.”
“Life sciences, medicine and healthcare are industries without borders. I want us to grow enough so that we can soon say, ‘Is it enough to be based only in Kobe and Tokyo?’ when we have discussions with other startups in 5 to 10 years.”
Taruho Kuroda, LEO Pharma
“I hope that the scale of the cluster will keep expanding as it maintains its cozy atmosphere, dense network, and one-stop support system provided by the FBRI. I also hope that the local government will continue to invest funds and human resources in areas where they should be investing.”
Tadaaki Hanatani, FBRI
“People in Tokyo know little about Kobe. Most people in the startup community in Tokyo probably don’t even know that Kobe has a large biomedical cluster. There’s a very high hurdle in trying to tell these people about Kobe’s startup support measures, but we would like to disseminate information about Kobe in collaboration with the incubation offices in Tokyo such as here at CIC.”
One of the key people supporting life science startups in Kobe who MCed at the event and who was also present at Sessa Startup Pitch the next day, shared some of their future prospects with us privately. Takeshi Maruki, Assistant Manager of the Research Division of KBIC Department, exclusively commented:
“In the medical field, the necessity of start-up technologies to create new drugs and medical devices has become a trend not only in Japan but around the world. Although Japan lags behind the U.S. in the amount of investment in this field, we believe that Japan is not far behind the U.S. in terms of basic research capacity.
I believe that if Kobe, the city which has the largest biomedical cluster in Japan, becomes more energized, Japan as a whole will become more vibrant. If good new drugs and medical devices are produced in the medical field, we can contribute not only to people in Kobe and the rest of Japan but also around the world. We would like Kobe to become a city that can contribute to the global community.”
Kobe City welcomes any startup seeking support. They are waiting to hear from you and know how passionate you are to change society and the world!
Startup Ecosystem Kobe: kobestartup.com/
Kobe Biomedical Innovation Cluster (KBIC): fbri-kobe.org/kbic/english/
Foundation for Biomedical Research and Innovation at Kobe (FBRI): fbri-kobe.org/english/