A quiet financial current is sweeping from Tokyo to Europe, reshaping how global venture capital is distributed. Huge swathes of cash are now flowing from Japan into European tech startups, as risk-averse Japanese investors seek a more mature entrepreneurial ecosystem.
While Europe’s startup and venture capital scene long operated under the long shadow of Silicon Valley, some analysts believe the continent has matured. Its combination of strong industrial heritage, government-backed innovation programs, and corporate discipline is drawing in capital from Japan’s conglomerates and funds looking for stable but high-tech growth opportunities.
According to a report by venture capital firm NordicNinja and data platform Dealroom, Japanese corporates and venture capital funds with Japanese limited partners have taken part in European financing rounds worth over €33 billion ($38 billion) since 2019, when the EU-Japan Economic Partnership Agreement came into effect. The figure dwarfs the €5.3 billion recorded in the five years before the deal — a sixfold jump that signals a strategic realignment.
Before that agreement, “there was no Japanese capital other than SoftBank,” said Tomosaku Sohara, co-founder and managing partner of NordicNinja. His firm, which manages €250 million in assets, is itself a bridge between Tokyo and Europe, formed through a collaboration between its partners and JBIC IG Partners, an investment arm of the Japan Bank for International Cooperation.
“SoftBank was pretty active already at that moment because they had acquired Finnish gaming company Supercell,” Sohara told CNBC, noting that the move breathed life into Finland’s early-stage startup ecosystem.
That deal, back in 2016, marked one of the first major Japanese bets on Europe’s innovation scene.
Since then, a wider cast of Japanese giants — including Mitsubishi, Sanden, Yamato Holdings, and Marunouchi Innovation Partners — have quietly stepped in to back European startups directly. Meanwhile, Japan-linked VC funds such as NordicNinja, ByFounders, and Toyota’s Woven Capital are signing checks for European ventures across the continent.
Part of the appeal is scale. Europe now hosts more than twice as many VC-backed startups per capita as Japan and 4.3 times more unicorns, according to the same report.
Silicon Valley’s shadow gives way to a cultural fit
Japan’s appetite for tech investment has never been in doubt — but its earlier focus leaned heavily toward the U.S. In the early 2000s, Japanese conglomerates raced to set up corporate venture capital arms in Silicon Valley, hoping to tap into the next Google or Facebook.
But that bet came with limits. “Nobody wanted to look at Europe at that moment,” Sohara recalled. “After a couple of years they realized, ‘Hey, maybe the U.S. culture is totally different from the Japanese culture,’ and they began thinking, ‘Maybe we need to look at another region like Europe.’”
The difference, he said, lies in mindset. European founders often emerge from large corporates — veterans of Nokia, Ericsson, Airbus, or Skype — who combine industrial experience with entrepreneurial drive. That profile resonates with Japan’s business culture, where long-term planning and engineering rigor are prized but the raw entrepreneurial spirit is harder to find.
“They have experience at the corporates and also they have a mindset of entrepreneurship,” Sohara said. “Japan, unfortunately, is lacking the entrepreneurship mindset.”
The deep tech magnet
For Japanese investors, Europe’s strongest pull lies in deep tech — companies rooted in scientific and engineering breakthroughs rather than consumer-facing apps. These are firms working on artificial intelligence, quantum computing, autonomous systems, clean energy, and defense technologies.
Deep tech and AI together accounted for 70% of Japanese-linked investment deals in Europe in 2024, mirroring global trends where governments and investors alike are betting on technologies with long-term strategic importance.
Among the top-funded startups with Japanese participation this year are:
- Wayve, the U.K. autonomous vehicle startup that raised $1.05 billion in May 2024, backed by SoftBank.
- Quantinuum, a British quantum computing firm that secured €273 million in January 2024, with Mitsui among investors.
- Multiverse Computing, a Spanish quantum company that landed €189 million in June 2025 from Toshiba and others.
These are bets on science-heavy ventures that typically require not only patient capital but also deep industrial knowledge — both of which Japanese investors bring in abundance.
Yet this surge in funding also highlights Europe’s lingering weakness: scaling such companies into global leaders. While the continent produces plenty of world-class engineering talent and research, its venture ecosystem remains thinner than America’s when it comes to late-stage capital and exits.
Deep tech firms are said to require a lot of growth capital and industrial experience to scale successfully — two elements that Europe famously lacks.
For Japan, this new focus on Europe marks more than just diversification. With an aging population and a risk-averse domestic market, Japanese corporates are under pressure to find growth beyond their borders. Europe, with its tightening ties through the EU-Japan trade agreement and its emphasis on technology sovereignty, offers a natural match.
In many ways, these investments reflect Japan’s own industrial philosophy — slow, methodical, long-term. Europe’s blend of academic excellence and public-private collaboration has become a mirror for that ethos, contrasting sharply with Silicon Valley’s rapid-fire, disruption-first culture.
