CNBC·2025-11-10 11:22Core Insights - A significant influx of Japanese capital is being directed towards European tech startups, particularly in the deep tech sector, as Japanese investors seek a more mature entrepreneurial environment [1][9] - Since the EU-Japan Economic Partnership Agreement in 2019, Japanese investors have participated in over 33 billion euros ($38 billion) in European financing rounds, a stark increase from 5.3 billion euros in the five years prior [2][3] Investment Trends - Japanese venture capital firms, including NordicNinja, are increasingly backing European startups, with a focus on deep tech and artificial intelligence, which accounted for 70% of their deals in 2024 [9][10] - The top-funded companies with Japanese participation include Wayve, Quantinuum, and Multiverse Computing, which raised significant amounts in recent funding rounds [10] Market Dynamics - There are more VC-backed startups in Europe than in Japan, with a ratio of over two times per capita and 4.3 times more unicorns [5] - Japanese firms are leveraging their extensive manufacturing and industrial expertise to fill gaps in Europe’s scaling capabilities, particularly in sectors like energy and critical minerals [12][14] Cultural and Operational Considerations - Language barriers and cultural differences pose challenges for collaboration between Japanese and European firms, affecting decision-making processes and partnership dynamics [16][17][18] - Japanese investors tend to have a slower decision-making pace due to thorough research and preparation, contrasting with the more rapid approaches seen in other regions [18][21] Future Outlook - Expectations indicate that Japanese investors will participate in rounds worth 3 billion euros in 2025, a decrease from previous years, amidst shifting investment interests towards the Middle East [23][24] - Political motivations in Japan are driving a strategic push for greater collaboration with Europe, aiming to enhance the geopolitical positioning of Japanese corporates [25]