Interview

Kansai University-Based Startups Supporting the Deep Tech Industry

Kunihiro Tanaka, CEO, President of SAKURA internet Inc., founded the company in 1996 as a fourth-year student at Maizuru National College of Technology in Kyoto. In 1999, he officially established SAKURA internet Inc. in Osaka. The startup ecosystem in Kansai has been thriving, with significant advancements over the past decade. Today, the momentum is further driven by the Osaka/Kansai World Expo, and President Tanaka shares his optimism, stating, "This is a chance to transform the startup scene in Japan and the world through Kansai."

Key Takeaways from the Article

• Growth-oriented startups are accelerating their development as experienced entrepreneurs inject passion and knowledge. Over the past decade, the growth and expansion of startups have progressed rapidly.
• Kansai is home to numerous emerging leaders in deep tech, including experienced CFOs and CMOs who have successfully driven startup growth.
• By leveraging the momentum of the Osaka/Kansai Expo, startups committed to driving societal improvement will further enhance Kansai's position as a key player in the global startup ecosystem.

What are the advantages of starting a business in Osaka?

"The cycle of nurturing talent, where those who were once mentored transition into becoming mentors themselves, is well established here."

Osaka offers a supportive environment for startups, with a robust local economy and a united community that actively encourages entrepreneurs. Unlike Tokyo, which is characterized by an abundance of diverse communities, Osaka has fewer but more tightly knit networks. This focused environment often increases the success rate for those aiming high. Furthermore, Osaka is home to dozens of companies that began as startups and have successfully gone public. To foster a thriving entrepreneurial ecosystem, it’s crucial for individuals who were once nurtured to take on the roles of nurturing others. While such cycles are less prominent in regions outside Tokyo, Osaka has successfully established this dynamic.

How is this entrepreneurial ecosystem supported?

"Prominent business leaders from publicly-listed companies provide mentoring opportunities."

Organizations like "EO Osaka," which bring together entrepreneurs, offer mentoring sessions led by renowned executives from publicly-listed companies to support promising startups. Additionally, the "Booming!" accelerator program injects passion and knowledge into growth-oriented startups aiming for IPOs, accelerating their development. Over the past decade, the expansion and reproduction of startups have significantly advanced. Moreover, large corporations such as Hankyu Hanshin Holdings and Sumitomo Mitsui Banking Corporation have also launched and established incubation centers to further support entrepreneurial initiatives.

Kansai is said to have closer ties between large corporations and startups compared to Tokyo. What are your thoughts?

"There are more opportunities to directly meet representatives of large corporations, resulting to higher matchmaking success rates."

Although Kansai has fewer large corporations compared to Tokyo, which could be perceived as a disadvantage, this actually works in favor of startups. The region also has fewer administrative bodies, venture capitalists, and events compared to Tokyo, meaning attendees often encounter familiar faces repeatedly. However, this dynamic helps foster a tightly knit community, which can be advantageous. In fact, Kansai provides numerous opportunities to directly connect with representatives of large corporations, resulting in high matchmaking accuracy.

The number of university-based startups is on the rise, with 2024 marking a record high. What sets Kansai apart in this regard?

"Kansai, with its abundance of universities, is likely to emerge as a hub for deep tech industries."

Startups are increasingly driving paradigm shifts, leveraging the internet and IT to create the next wave of industries. Deep tech—advanced, cutting-edge technologies—is gaining significant attention. Many companies involved in deep tech originate from university-based startups. In this regard, Kansai, home to prestigious institutions like Kyoto University and Osaka University, is well-positioned to emerge as a hub for deep tech industries. Collaborative efforts among academia, industry, government, and finance are steadily advancing in the region.

The foundational base for this ecosystem is the Kansai Science City, spanning Kyoto, Osaka, and Nara. Commonly known as "Keihanna Science City," it hosts seven universities, including Kyoto University and Doshisha University, along with national research institutes specializing in quantum science, environmental studies, electrical and information technology, AI, biotechnology, and robotics. The area is home to over 150 facilities, including corporate research centers from companies like Shimadzu Corporation, Omron, Kyocera, and Nidec. With more than 10,000 researchers, the ecosystem is thriving and growing.

What is necessary to further accelerate the deep tech ecosystem in Kansai?

"We need to bring in experienced executives, such as former CFOs who have successfully scaled startups."

The deployment of skilled executives is essential. Fortunately, Kansai has a rich pool of talented professionals, including former CFOs and CMOs with proven success in driving startup growth. Leveraging such expertise is vital. Additionally, fostering an environment conducive to attracting investment is indispensable. Venture capitalists are increasingly focusing on Kansai, and major startup events like IVS, held in Kyoto, highlight the growing attention on Kansai-based startups. The deep tech ecosystem is undoubtedly gaining momentum.

The Osaka/Kansai Expo is generating excitement. How will this impact Kansai startups?

"I hope startups grow into global companies that aim to improve society."

The Expo has certainly added momentum to the region. Kansai is rich in tourism resources, and the synergy with the Expo could boost the local economy and elevate the presence of Kansai startups. This presents an excellent opportunity to transform the startup scene both in Japan and globally through Kansai. Hosting the "Global Startup EXPO 2025" at the Expo venue is particularly meaningful, as it underscores the idea of a united world. Entrepreneurs inherently aspire to improve society, and their efforts to address global challenges have the potential to foster greater happiness worldwide. By leveraging their activities in Kansai, startups can grow into global enterprises committed to improving society. If entrepreneurs approach their business ventures with this vision, Kansai's startup ecosystem will undoubtedly attract even greater attention.