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Ecosystem Spotlight: Growth of the Japanese Innovation Ecosystem with Delight Ventures 

Delight Ventures

In 2019,  Delight Ventures was founded as a venture capital firm aiming to help startups and entrepreneurs emerge from Japan and expand further out into the world. Delight Ventures is one of few VCs run by successful entrepreneurs, relative to many of the Japanese VCs run by ex-consultants or those with a financial background. 


Co-founder Tomoko Namba is an entrepreneur who built DeNA Co., Ltd. one of Japan’s largest social network and mobile game companies, from the ground up. Her co-founder, Dai Watanabe is a seasoned business leader in the tech industry with experience in Japan, China, and the US, including serving as VP of Strategy and Corporate Development at DeNA.


As a newer venture capital firm in Japan, Delight Ventures has had impressive momentum marked most recently by a remarkably fast funding round in April 2023. They raised 15 billion Yen (110 million US dollars) with limited partners representing institutional investors, large (top 3) banks, and life insurance companies. This successful round was partially due to the credit of Tomoko and her involvement with the Japanese Business Federation. 


Delight Ventures is now expanding their fundraising efforts internationally to align with the model in which they guide their portfolio companies to grow and scale with a global approach. 


Delight Venture’s approach is centered on five promises you make to entrepreneurs you work with. Can you share some insight into these promises and why they are important to you?

The Japanese startup ecosystem is still at the early stage of evolution and many of the investors, VCs and LPs, are corporates. In Japan, it is more common for corporations to invest in startups than it is in other international markets such as the US. The business market is structured in a way for corporations to have resources available for such investments, and therefore corporate innovation is a critical component of startup fundraising. 

However, the risk of running a startup business is largely imposed on founders, not the investors. That is a suboptimal environment for big innovations. The five promises are set forth to change that premise, and to show that Delight Ventures is willing to take risks to foster world-changing innovations.


One of these five promises is centered around a global standard, which emphasizes your focus on building startups to succeed internationally. Can you tell us more about this focus?

With Japan being the third largest economy and a mostly homogeneous country, startups and VCs there have many incentives to stay domestic. This caused the ecosystem to evolve uniquely toward small successes and being risk-averse. One reason we want to operate with a global standard is to leapfrog over the delay that the Japanese ecosystem is in by taking advantage of the 50+ years of evolution that Silicon Valley has gone through. We just don’t have enough time for the ecosystem to grow organically into where the rest of the developed world is now. Another reason is that startups should not consider the Japanese market large enough to make substantial innovations. The Japanese population is shrinking, and many recent Japanese tech products have succumbed to those from overseas.


What’s your outlook on the state of technology and innovation in Japan?

There are a few key influences currently contributing to the growth and influence of the Japanese innovation ecosystem:

  • The Japanese government launched a five-year policy plan to boost the startup ecosystem, aiming to increase the number of startups and funding by 10x. It started to make changes in laws and tax codes to prioritize startup growth at a pace never seen before.
  • Japan has the third largest number of patented technologies after China and U.S. Universities and corporations are known to have started to license and sell patents for startups, expanding the resources or opportunities for founders.
  • Top talent leaving large corporations used to be a rarity ten years ago. Not anymore. Startups are becoming part of mainstream culture, and a critical draw for professionals at varying stages of their careers. It resembles the change that some Western European countries went through.


What are the technology trends in Japan currently, and what industries is Delight Ventures most interested in?

Technology trends in Japan are currently centered around deep-tech, especially climate tech and life-science. Japan has the third most patented IPs in the world. Until recently these IPs were kept unavailable by corporations and universities. Now however, these stakeholders, including the government, are making an effort to spin them out as startups. 

Delight Ventures is most focused on climate tech, along with fintech and productivity. While relevant in the Japanese ecosystem, these are also industries with opportunities to grow internationally.


Are there any startups or success stories from your portfolio companies that you’d like to highlight?

Two startups, shared below, are great examples of how a global presence is critical to their growth.

BeaTrust: An internal connectivity platform for large corporations. 

BeaTrust’s platform helps foster innovation within large corporations by creating a space for employees to connect with others across departments and geographic regions based on interests and skills. 

They are currently looking to establish themselves in the US, with a plan to launch early 2024. Many startups wait to go global after an IPO, which often leads to an unsuccessful global launch. At Delight Ventures, we are encouraging and supporting startups to establish themselves globally before going public. 


Typica: A direct trading platform for specialty coffee beans. 

Coffee beans are a commodity that consumers have become passionate about understanding where it is sourced, yet the consumption behavior is very diverse.  The coffee bean trade industry has a lot of middle men, and has largely stayed the same for a long time, leaving the smaller farms in a position of little negotiating power. Typica’s platform creates an opportunity for small farmers to connect directly with coffee roasters internationally to buy and sell their beans. 

While founded based on the interests of the Japanese population, Typica is expanding to Europe and the US which also have similar consumer markets for coffee consumption and sourcing.


What advice would you share with corporations looking to engage more with the Japanese technology ecosystem?

There is an opportunity for corporations to spin-out non-core businesses as startups in a way that the leaders own the majority of the company. This entrepreneur-first mentality (which is one of our five promises) creates space and motivation for the big innovations to develop. 

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