In the first two parts of our “Unlocking Japan” series, we explored the foundational principles of market entry and the critical timing and tactics for success. Now, in Part 3, we shift our focus to the other side of the table: the Japanese corporations themselves. How do they view the startup ecosystem, and what does their engagement model mean for founders looking to enter the market?

Through the lens of Osamu Abe’s nearly 30-year career at MUFG, one of Japan’s largest financial institutions, we’ll unpack the corporate view of startup innovation—a journey that has taken him from investment banking to the heart of Silicon Valley and back to the forefront of venture investing in Asia.

The Corporate Context: Why Japan’s Giants Are Investing in Startups

For decades, Japan’s economy was defined by its industrial giants and the promise of lifetime employment. But as the economy matured and traditional growth drivers slowed, a new consensus emerged, supported by both the government and corporate leaders.

“As the economy matures and the industry cycle continues… How should Japan continue its growth cycle, right? And what we said was, okay, hold on. Think about the post-war economy—Sony, Honda. These really started as small startups built by the younger generation. So, I think it’s a common understanding and goal, supported also by the government, that we should support the startup ecosystem in Japan.” [1]

This realization sparked a wave of corporate interest in the startup world. Facing a mature domestic market and demographic headwinds, Japanese corporations began to look outward to the booming economies of ASEAN and India, searching for new technologies, new industries, and, most importantly, new sources of growth. Today, Japan has more corporate venture capital (CVC) funds than traditional VC funds, a clear sign of this strategic shift [2].

The MUFG Case Study: A Journey into Venture

Osamu Abe’s career at MUFG provides a case study in how a traditional Japanese institution systematically built its venture investment capabilities. The journey wasn’t a single leap but a series of deliberate, strategic steps:

• The CVC Foundation (2019): MUFG’s journey began with a traditional JPY 20 billion Corporate Venture Capital (CVC) fund in Tokyo, MUFG Innovation Partners (MUIP), focused on finding FinTech collaboration opportunities in the US and other global markets [3].
• International Expansion (2022-2023): The next step was to go directly to the source of growth. MUFG launched several international focused funds like the $300 million Ganesha Fund in India (2022) and the $100 million Garuda Fund in Indonesia (2023) [4][5]. These funds had a dual purpose: generate economic returns and serve as a vehicle for market entry, learning, and even social impact by “banking the unbanked.”
• Spinning Out Innovation (2020-Present): Recognizing the need for speed and agility, MUFG then did something remarkable for a traditional bank: it co-founded Mars Growth Capital and Mars Equity. These entities, which Abe-san led as CEO, combined the bank’s capital with an AI-driven underwriting engine to offer non-dilutive venture debt and growth equity at unprecedented speed [6].

“We saw a niche that no one else offered, which is non-dilutive financing… Once the information is shared, we can typically offer you a term sheet within 24, 48, or 72 hours. This really helped us increase the speed of decision-making and communication.” [1]

This evolution—from a traditional CVC to international funds to agile, AI-powered spinouts—demonstrates a deep commitment to adapting to the realities of the startup world.

The Two-Way Street: Aligning Startup Value with Corporate Goals

For startups, the benefits of partnering with a corporate giant like MUFG are clear: capital, credibility, and access to a vast network of clients. A partnership provides a “stamp of approval” that opens doors across the ecosystem.

But what do the corporations get out of it? Understanding this is the key to building a successful, long-term relationship. For Japanese institutions, partnering with startups is not just about financial returns; it’s a strategic imperative. As Osamu Abe explains, it’s about gaining access to three critical assets:

1. New Technology and Innovation: Startups are a vital source of the cutting-edge technology and agile business models that large corporations need to stay competitive.
2. New Industries and Markets: They provide a window into emerging industries and high-growth markets like Southeast Asia, offering a pathway for expansion.
3. New Talent and Mindsets: Engaging with startups exposes corporate teams to a different way of thinking—faster, more agile, and more customer-centric. This cultural cross-pollination is invaluable.

“We want to make sure that we are not left behind in terms of new technology, new industries, and new talent. We want to be part of that ecosystem, and we want to be a good partner.” [1]

For founders, this means your value proposition to a corporate partner extends far beyond your product. You are a source of strategic intelligence, a potential gateway to new markets, and a catalyst for internal transformation.

The Founder’s Playbook: Aligning with the Corporate Vision

With this two-way value exchange in mind, founders can approach corporate partnerships more strategically. The goal is not just to secure a deal, but to align with the corporate’s long-term vision. Here is a revised playbook, building on the insights from Part 1 and Part 2 of our series:

• Embrace Patience as a Strategic Alignment Tool: The deliberate, process-driven nature of Japanese corporations is not a bug; it’s a feature designed to ensure stability and long-term success. By embracing this pace, you demonstrate that you are a reliable, low-risk partner, aligning with their core need for stability.
• Build Governance as a Feature, Not a Chore: Strong governance and compliance are non-negotiable for regulated institutions. By building a robust governance framework from day one, you de-risk the partnership for the corporate, making it easier for them to champion you internally and align you with their strategic goals.
• Position Your “Key Japanese Partner” as a Corporate Asset: As we discussed in Part 2, finding a local champion is critical. Frame this relationship not just as a benefit for you, but as a benefit for the corporate. Your local partner is their assurance that the collaboration will be managed effectively, culturally attuned, and more likely to succeed.
• Think Beyond Equity to Align Growth Models: The rise of venture debt, with the venture debt market in Japan expected to reach nearly $260M in 2025, offers a new way to align with corporate partners [7]. By using non-dilutive capital for growth, you can scale at a pace that is ambitious yet sustainable, demonstrating a mature approach to financial management that resonates with the risk-averse nature of large institutions.

Ultimately, unlocking Japan’s corporate giants requires seeing the world from their perspective. It’s about understanding that you are not just selling a product; you are offering a partnership that can help them navigate the future. By aligning your strategy with their long-term goals, you can build a relationship that is not just profitable, but truly transformative.

References:

[1] Osamu Abe, MUFG Chief of Staff for Asia Pacific, on venture investing for banks and institutions

[2] CVC in Japan: Connecting Startups with Corporate Innovation Trends

[3] Establishment of MUFG Innovation Partners Co., Ltd.

[4] MUFG Bank to Invest USD 300 Million in Indian Startups

[5] MUFG, Japan’s largest bank, launches $100M fund for Indonesian startups

[6] MUFG Bank and Liquidity Capital Establish Joint Venture for Startup Debt Financing

[7] Venture Debt – Japan | Statista Market Forecast