Why are Japanese unicorn companies so poor?
Unicorn, referring to startups with valuations of more than $1 billion. In 2013, the word unicorn appeared and quickly became popular in Silicon Valley and appeared on the cover of the world's leading financial magazine Fortune. According to the data, in the 10 years to 2013, only 39 companies in the world have stood out from more than 60,000 competitors, achieving a valuation of more than $1 billion.
Therefore, for these fast-growing companies, Aileen Lee, the famous American Cowboy Venture investor, coined the term “unicorn” to describe the scarcity of these companies.
However, as of March 2018, the number of global unicorn companies climbed to 279, including Uber, Ant Financial, Didi Travel, Xiaomi, and Airbnb.
fast-growing
In the past few years, the reason why Unicorn has grown rapidly is more than one.
Investors and venture capital firms have been adopting a strategy called “fast-growing”. In this case, they will invest a lot of money, so that the startup can exceed the competition as soon as possible to gain market share. This strategy is driven by increased private capital availability and technological advances, and technological advances enable start-ups to grow faster than ever before.
Because startups can return more capital to investors, these companies do not need to make an initial public offering (IPO). If the market believes that the valuation is too high, then the IPO may risk the depreciation of the company's valuation.
Finally, many startups can quickly become unicorn companies by being acquired by big companies such as Apple, Facebook, and Google.
Japan has only one unicorn company in recent years.
More than 200 unicorn companies are distributed in dozens of countries around the world, with nearly 50% in the United States and 25% in China. In contrast, although Japan is the third-largest economy in the world, the number of unicorn companies is very small.
In recent years, there has only been one unicorn company in Japan, Mercari, a second-hand market platform in Tokyo. In this way, the use of the term "a handful of words" is overkill, and it can be said that it is "single seedling".
Mercari was founded in 2013 and has been expanding rapidly to the US and UK markets since its inception. In March 2017, Mercari completed a D round of $74 million financings and was valued at more than $1 billion to become a unicorn company. In just four years, from growing into a unicorn and then to an independent IPO, Mercari can be said to be a miracle in the Japanese Internet industry.
Mercari's product form is not indistinguishable from familiar familiarity and leisure fish: users are not divided into buyers and sellers, all use the same app, can quickly and easily publish goods, set prices, and then pay by credit card, etc. Ways and logistics methods such as express delivery companies.
Three major reasons hinder the growth of the new unicorn
Japan, which has always been proud of its technology leaders, is lagging behind other Asian countries in the number of unicorn companies, and it is simply no match for China.
As we all know, Japan in the last century is a representative of technological innovation. Companies such as Sony, Panasonic, and Seiko have made Japan stand out among the world's top corporate jungles. However, with the deepening of globalization and the popularity of Internet elements, these industry giants and rigid institutions have not only failed to adapt to the changes of the times but have even become a stumbling block to innovation and development.
Gen Isayama, co-founder and CEO of World Innovation Lab, believes that the reason why Japanese technology unicorn companies are pitiful is mainly due to the following three reasons:
First, in Japan, there are very few investment companies that can provide growth capital, so many technology startups are listed at lower valuations. According to statistics, in the 12 months to the end of March 2018, Japanese startups have only raised $1.3 billion from venture capital institutions, and $70 billion and $20 billion respectively from US and Chinese startups. Form a strong contrast;
Second, start-ups that receive financing in Japan tend to focus on the domestic market, which undoubtedly limits growth.
Finally, the Japanese technology industry lacks entrepreneurs and managers who can make the company grow into a unicorn company. With start-ups that need to make a lot of effort but may not be rewarded, the vast majority of talented Japanese university graduates are more willing to work for big companies, because this may lead them to the “iron rice bowl”.
Letting the Japanese start a business can be described as "difficult to go to the sky." Last year, opinion poll data showed that 66.9% of Japanese people did not have the willingness to start a business. In fact, in Japan, the number of entrepreneurs is less than 3% of the total population, and the cost of starting a business is 75 times that of the UK.
To create more unicorns, change
Isayama pointed out that if Japan wants to create more unicorn companies, it needs to make some changes:
At the domestic level, large Japanese companies can play the role of investment companies, providing growth capital for start-up companies. Softbank Group CEO Masayoshi Son created the $100 billion project, the Softbank Vision Fund, which is based in Japan but invests in companies or projects in other countries. Other big companies need to speed up and create some smaller funds.
From an international perspective, the Japanese government and large companies in the country must establish overseas integrated business development centers to help their startups expand into overseas markets while introducing Japanese technology business people to successful unicorn companies. In cultivating their entrepreneurial spirit.
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