Japan’s Unicorn Startups: A New Era of Innovation Beyond Silicon Valley
Japan has long been recognized for its formidable corporations, yet a transformational shift is gaining momentum, as the nation’s ambitious startup scene begins to attract global attention. With an increasing number of rising stars dubbed “unicorns”—startups valued at over $1 billion—Japan is asserting itself as a burgeoning innovation hub. In a bid to cultivate this environment, the Japanese government rolled out the Startup Development Five-Year Plan in 2022, committing a staggering JPY10 trillion (approximately $70 billion) to nurture 100 unicorns and 100,000 startups by 2027. This aggressive initiative is establishing Japan as a prominent player in the Asian startup ecosystem.
Rising Unicorns: A Closer Look
This article explores six groundbreaking unicorn startups that are reshaping sectors such as technology, finance, biotechnology, and artificial intelligence (AI), illustrating Japan’s remarkable evolution in the business landscape.
1. SmartNews: Revolutionizing News Delivery
Founded in 2012 by Ken Suzuki and Kaisei Hamamoto in Tokyo, SmartNews is a cutting-edge news aggregation app powered by artificial intelligence. Unlike traditional news platforms, SmartNews utilizes advanced machine learning algorithms to analyze over 10 million articles daily, providing users with a personalized news feed tailored to their interests.
SmartNews achieved unicorn status in 2019 after successfully raising $92 million in Series E funding, bringing its valuation to approximately $1.2 billion. A subsequent investment of $230 million in 2021 propelled its valuation to over $2 billion. With over 20 million active users, primarily in Japan and the U.S., SmartNews continuously evolves to provide a reliable and engaging news experience.
2. SmartHR: Transforming HR Practices
Established in 2013 by Kensuke Naito and Shoji Miyata, SmartHR is ushering in a new era in Japan’s paper-heavy human resources sector. Its intuitive cloud-based platform digitizes HR processes, ranging from employee onboarding to payroll management, drastically reducing administrative burdens for businesses.
SmartHR achieved unicorn status in 2021, securing $114 million in Series D funding, followed by an additional $140 million in 2024. As of now, SmartHR is serving over 60,000 companies across Japan, significantly boosting productivity and enhancing employee satisfaction in organizations.
3. Sakana AI: Pioneering Sustainable AI Solutions
Launched in July 2023, Sakana AI is at the forefront of sustainable artificial intelligence advancements. Founded by former Google Brain researcher David Ha and Llion Jones, Sakana AI focuses on resource-efficient AI models, revolutionizing the technology landscape.
The firm employs an innovative "Evolutionary Model Merging" method, akin to natural selection, resulting in efficient models like three recently open-sourced Japanese language models. Within its first year, Sakana AI secured $30 million in seed funding, quickly following it with a $200 million Series A round, achieving a valuation surpassing $1.5 billion.
4. Preferred Networks (PFN): Deep Learning for Industry 5.0
Founded in 2014 by Toru Nishikawa and Daisuke Okanohara, Preferred Networks is a trailblazer in the intersection of theoretical AI research and practical applications. With significant early investments from powerhouses like Fanuc and Toyota, PFN has gained recognition for its adeptness in applying deep learning across sectors such as manufacturing, transportation, and healthcare.
In 2015, PFN launched Chainer, a pivotal open-source deep learning framework utilized throughout Japan’s AI landscape. With a valuation exceeding $2 billion by 2018, PFN continues to expand, recently securing $69 million from SBI Holdings to delve into semiconductor development.
5. Opn: Leading the Charge in Digital Payments
Originally founded in Bangkok in 2013 and now headquartered in Tokyo, Opn (formerly known as Omise and Synqa) is transforming the digital payments landscape. With solutions that innovate mobile wallets and credit card processing, Opn simplifies transactions for businesses across Asia.
In 2022, Opn reached unicorn status, raising $120 million to surpass the $1 billion mark in valuation. The startup strategically expanded internationally, including an acquisition of Atlanta-based MerchantE for approximately $400 million, signifying its commitment to becoming a global leader in payment solutions.
6. Spiber: Innovating Sustainable Biotech Materials
Founded in 2007 by Kazuhide Sekiyama and Junichi Sugahara, Spiber is pioneering sustainable materials through its unique Brewed Protein technology. By engineering fibers that emulate the properties of spider silk without relying on animal or petroleum resources, Spiber is developing sustainable alternatives to traditional textiles.
In September 2021, Spiber secured $221 million in a funding round that elevated its valuation to about $1.2 billion. Partnering with global brands such as The North Face and Toyota, Spiber is set to revolutionize the materials landscape by establishing key production facilities in Thailand and Iowa.
Japan’s Startup Ecosystem: A Bright Future Ahead
The extraordinary achievements of SmartNews, SmartHR, Sakana AI, Preferred Networks, Opn, and Spiber illuminate Japan’s potential for innovation-driven growth. With significant support from government initiatives and an influx of venture capital, these unicorn startups highlight a promising transformation from traditional business practices to a dynamic entrepreneurial spirit.
Despite persistent challenges, including a cautious business culture and funding limitations, these remarkable startups demonstrate that Japan is more than capable of fostering an innovative ecosystem. Continued momentum paired with supportive policies promises to drive extensive growth, inspiring future entrepreneurs and reaffirming Japan’s stature as a global innovation powerhouse.
Conclusion: Japan’s Next Chapter in Innovation
As Japan’s unicorn startups redefine what’s possible in technology, finance, and biotechnology, they inspire a wave of change that goes far beyond Silicon Valley. With a commitment to innovation, sustainability, and efficiency, these companies are paving the way for a brighter future. They not only exemplify Japan’s robust entrepreneurial spirit but also set compelling precedents for what a thriving startup ecosystem can achieve on the world stage. Emphasizing creativity, resilience, and adaptability, Japan’s unicorns are primed to continue making significant impacts as the nation’s exciting transformation unfolds.
