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How Japan’s unicorn startups are proving tech innovation isn’t just a Silicon Valley thing.
Japan, traditionally known for its large corporations and cautious business environment, is experiencing an exciting transformation. Today, the nation is home to an increasing number of dynamic startups known as “unicorns”—companies valued at over US$1 billion. To foster and accelerate this trend, the Japanese government introduced the Startup Development Five-Year Plan in 2022, pledging a substantial investment of JPY10 trillion (approximately US$70 billion). This ambitious plan aims to create 100 unicorns and 100,000 startups by 2027, positioning Japan as a major hub for startup innovation in Asia.
In this article, we highlight six remarkable unicorn startups significantly transforming technology, finance, biotechnology and artificial intelligence (AI) sectors, each contributing uniquely to Japan’s evolving business landscape.
SmartNews: Personalized news at your fingertips
Image from SmartNews
SmartNews was founded in Tokyo in 2012 by entrepreneurs Ken Suzuki and Kaisei Hamamoto, offering a cutting-edge free news aggregation app driven by AI. Unlike traditional news apps, SmartNews leverages advanced machine learning algorithms to analyze more than ten million articles daily and to deliver personalized news feeds to each user’s interests.
SmartNews gained unicorn status in 2019 after raising US$92 million in a Series E funding, achieving a valuation of approximately US$1.2 billion. In 2021, another significant investment of US$230 million further boosted the company’s value to over US$2 billion. The company has also been maintaining strategic collaborations with world-renowned news providers, such as Reuters, BBC and CNN, to enhance its reliability and appeal. Currently, SmartNews boasts more than 20 million active users, predominantly in Japan and the U.S., continually innovating to maintain a balanced, engaging and personalized news experience.
SmartHR: Digitizing the HR landscape
Image from SmartHR
Established in 2013 by Kensuke Naito and Shoji Miyata, SmartHR is revolutionizing Japan’s traditionally paper-heavy human resources industry through its intuitive, cloud-based platform. SmartHR efficiently digitizes complex HR processes, including employee onboarding, payroll, benefits management and compliance tasks, significantly reducing administrative burdens for businesses.
The startup became a unicorn in 2021 following a Series D funding round that secured approximately US$114 million, with a valuation of US$1.6 billion. In 2024, it raised an additional US$140 million through a Series E round, further reinforcing its market dominance. In February 2024, SmartHR reached over US$100 million in annual recurring revenue (ARR), a decent spike from the US$80 million in total revenue the company reported in FY 2023.
Today, SmartHR serves more than 60,000 businesses across Japan. Its seamless, streamlined approach helps organizations increase productivity, enhance employee satisfaction and reduce operational costs, making it a critical player in the HR technology space.
Sakana AI: Pioneering resource-efficient artificial intelligence
Image from Sakana.ai
Launched in July 2023 in Tokyo, Sakana AI addresses a crucial market need: powerful yet resource-efficient artificial intelligence solutions. Among the founders are David Ha, who previously led Google Brain’s research team in Tokyo, and Llion Jones, co-author of the influential Transformers research paper central to modern generative AI.
Sakana AI emphasizes sustainability and efficiency, pioneering “nature-inspired” generative AI models that require minimal computational resources. Its innovative “Evolutionary Model Merging” method, similar to natural selection, has successfully produced efficient AI models, including three open-sourced Japanese language models in March 2024. Mid-2024 saw the introduction of the “AI Scientist”, an automated system capable of autonomously generating academic research papers from conception to peer review.
Within a year of its inception, Sakana AI secured substantial investments—initially attracting US$30 million in seed funding, quickly followed by a massive US$200 million Series A round in September 2024. These investments brought the company’s valuation above US$1.5 billion, backed by renowned investors such as Nvidia, MUFG and NEA, highlighting its role as a significant player in global AI innovation.
Preferred Networks (PFN): Industry 5.0’s deep learning architect
Image from Preferred Networks, Inc.
Founded by AI researchers Toru Nishikawa and Daisuke Okanohara in 2014, Preferred Networks (PFN) connects theoretical AI research to practical applications in industries including manufacturing, transportation, healthcare and robotics. Early investments from industry giants Fanuc (US$7.3 million) and Toyota (US$8.1 million) in 2015 significantly propelled PFN’s growth, providing essential capital, valuable data and testing environments.
In 2015, PFN introduced Chainer, an influential open-source deep learning framework widely adopted across Japan’s AI community. That same year, partnerships with Panasonic, NVIDIA, Microsoft and Intel expanded its technological capabilities. PFN also excels in hardware innovation, developing MN-Core, a specialized AI chip designed for efficient deep learning computations. Its MN-3 supercomputer, powered by MN-Core chips, reached the top position on the Green500 list of energy-efficient supercomputers multiple times in 2020 and 2021, achieving groundbreaking efficiency levels.
In 2018, PFN achieved unicorn status with a valuation exceeding US$2 billion. Continuing its innovative streak, the company recently expanded into semiconductor development, securing nearly JPY10 billion (US$69 million) from SBI Holdings in 2024. PFN’s dual expertise in software and hardware, including the development of specialized AI chips, uniquely positions it as an integrated leader within the AI and robotics landscape.
OPN: Pioneering digital payments globally
Image from Opn website
Originally founded in Bangkok in 2013 by Jun Hasegawa and Ezra Don Harinsut and now headquartered in Tokyo, Opn (formerly Omise and Synqa) provides an extensive digital payments platform. The company simplifies transactions for merchants with solutions including mobile wallets, credit card processing and innovative blockchain-based payments.
In 2022, Opn reached unicorn status after raising US$120 million, pushing its valuation beyond the US$1 billion threshold. Notable investors include MUFG, Toyota and JIC Venture Growth Investments. Its client base comprises major enterprises like Toyota and the Thai duty-free giant King Power, significantly contributing to Asia’s transition to cashless commerce.
Beyond organic growth, Opn strategically expanded internationally by acquiring Atlanta-based payment processor MerchantE for around US$400 million in 2022. Currently, Opn operates in Japan, multiple Southeast Asian countries (Thailand, Singapore, Malaysia, Indonesia, the Philippines and Vietnam) and the United States, reflecting its extensive global reach.
Spiber: Revolutionizing sustainable biotech materials
Image from Spiber Inc
Spiber, founded by Kazuhide Sekiyama and Junichi Sugahara in 2007, leads innovation in biotechnology-derived materials through its proprietary Brewed Protein technology. After extensive R&D, Spiber successfully engineered sustainable fibers resembling spider silk using microbial fermentation, eliminating reliance on animal-derived or petroleum-based materials.
Brewed Protein fibers are sustainable alternatives to traditional textiles like silk and wool. They can even be molded into composites suitable for industrial applications. Global partnerships include collaborations with global brands such as The North Face, Goldwin, Toyota and Shiseido, highlighting the versatility of Spiber’s materials.
In September 2021, Spiber reached unicorn status following a JPY24.4 billion (approximately US$221 million) funding round led by Carlyle, valuing the company at about JPY135 billion (US$1.2 billion). Total funding has surpassed US$650 million as of 2024, supporting expansions into major production facilities in Thailand and Iowa. Expanding its global presence, Spiber also established a Paris office in 2023, aiming to better engage European markets and further solidify its leadership in sustainable biotech materials.
Japan’s startup ecosystem: A bright future ahead
The remarkable successes of SmartNews, SmartHR, Sakana AI, Preferred Networks, Opn and Spiber demonstrate Japan’s significant potential for innovation-driven growth. Supported by robust government initiatives, increased venture capital investment and growing global recognition, these unicorn startups highlight Japan’s exciting transition from conservative business traditions to dynamic entrepreneurship.
Although challenges remain—such as risk aversion, limited funding sources compared to global markets and slower technological adoption—these companies illustrate what’s possible. Continued momentum and supportive policies will likely drive substantial growth, inspiring future entrepreneurs and reinforcing Japan’s status as an innovation powerhouse.
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