Top Startups in Japan and Comprehensive Guide for Success 2025

Japan’s market is brimming with innovative ideas and exciting opportunities, but for foreign entrepreneurs and expats, navigating this landscape can sometimes feel like solving a complex puzzle. Whether you’re launching new startups in Japan or expanding existing businesses, understanding the unique challenges—from strict legal requirements to cultural nuances—is key to your success.

In this guide, we’ll break down the essentials of Japan’s startup ecosystem, highlight common obstacles you might face, and provide actionable strategies to overcome them. We’ll also showcase a snapshot of top Japanese startups and reveal how leveraging cross-border eCommerce solutions can simplify your journey into the Japanese market.

Let’s dive in and explore what it takes to thrive in Japan startup world!

1. Overview of Japan's Startup Ecosystem

Before we dive into the details, let’s take a step back and look at the bigger picture. Japan's startup scene is a fascinating blend of tradition and modern innovation—full of promise, yet not without its challenges. In the following lines, we’ll break down the market trends fueling this growth and uncover the key obstacles—be it legal, operational, or funding-related—that foreign entrepreneurs like yourself need to tackle to launch startups in Japan successfully.

1.1. Market landscape & trends

Japan's startup scene has undergone a remarkable transformation over the past decade. Once dominated by established tech giants, the landscape now buzzes with innovative startups reshaping industries like fintech, robotics, and eCommerce. In fact, new startup registrations have surged by roughly 150% over the last ten years—a clear signal that entrepreneurial energy is on the rise.

Here are the key sectors driving this change for startups in Japan:

• Technology & Fintech: Startups in these areas are shaking up traditional financial services by offering seamless digital solutions that make managing money simpler and more intuitive.
• Robotics & AI: Thanks to Japan's long-standing reputation for engineering excellence, a wave of startups is pioneering advanced automation and cutting-edge AI applications that set new industry benchmarks.
• eCommerce: With a massive and increasingly digital-savvy consumer base, Japanese digital marketplaces are expanding rapidly, creating exciting opportunities for global trade.

Adding to this dynamic landscape, robust government initiatives are fueling further momentum. Numerous programs and incentives have been rolled out to support early-stage startups in Japan, leveling the playing field for foreign entrepreneurs eager to enter the market. In 2022, Japan unveiled the Startup Development Five-Year Plan, aiming to increase the number of startups tenfold by 2027. Accordingly, the government has earmarked approximately ¥1 trillion (about €6.3 billion) and seeks to amplify investments to ¥10 trillion (about €63 billion) over the plan's duration. 

1.2. Common challenges for foreign entrepreneurs

While Japan’s startup scene is bursting with opportunity, it’s not without its hurdles—especially for foreign entrepreneurs. Here are some of the key challenges you might face when trying to launch startups in Japan:

• Legal and regulatory hurdles

Japan’s legal landscape can seem like a maze. From navigating the intricate business registration process to dealing with strict compliance requirements and visa regulations, the paperwork and formalities can be overwhelming at first.

• Operational and logistical challenges

Running a startup in Japan also requires you to adapt to local business practices. Language barriers and cultural differences can make everyday operations, such as communicating with local partners and setting up a reliable supply chain, more complicated than expected.

• Funding and market entry risks

Even if you manage to overcome legal and operational challenges, there’s more to worry about. Despite growing investor interest, the investment culture in Japan is traditionally more cautious, which requires some extra effort to attract the right capital. Plus, breaking into a competitive market with well-established local players poses significant challenges, you’ll need a solid strategy to manage market entry risks and stand out from the crowd.

2. Top Startups in Japan: A Quick Snapshot

As we’ve seen, Japan’s startup ecosystem is vibrant and rapidly evolving. With a surge in entrepreneurial energy and supportive government initiatives, it’s no wonder that innovative companies are emerging all over the country. Now, let’s take a quick look at some of the top startups in Japan that are not only making waves locally but also capturing global attention.

Here’s a short list of startup companies in Japan you should learn from:

2.1. Mercari

Found in 2013, Mercari is one of the best startups in Japan which has transformed Japan’s second-hand marketplace into a global phenomenon. With roughly 100 million downloads—700,000 of which occurred in March 2024 alone—and a staggering valuation surpassing $300 billion, Mercari’s intuitive mobile platform effortlessly connects buyers and sellers across borders. Its success is a powerful reminder that simplicity and innovation can drive explosive growth.

Want to start selling on Mercari? Learn 08 tips on how to launch fast with us! 

2.2. Paidy

Established in 2008, Paidy is at the forefront of Japan’s fintech revolution. With its innovative “pay later” solution, Paidy has attracted about six million users and rapidly increased its transaction volume. By simplifying traditionally cumbersome cash-based transactions, Paidy is setting new standards for digital financial services and gaining strong traction among both consumers and investors.

2.3. BASE

Since its inception in 2012, BASE has empowered countless entrepreneurs to dive into eCommerce. With an easy-to-use platform, BASE enables small businesses to build and manage online stores without the technical hassles, driving growth in Japan’s ever-expanding digital marketplace.

With impressive merchant adoption rates and consistent expansion, BASE is a prime example of technology democratizing business opportunities. 

2.4. free

freee, founded in 2012, offers a cloud-based accounting solution that is transforming financial management for small and medium-sized enterprises. With over a million registered users and robust revenue growth, freee simplifies complex bookkeeping and compliance tasks, allowing startups to focus on innovation rather than administrative burdens.

2.5. SmartHR

Next in our list of top startups in Japan, SmartHR is leading the charge in modernizing human resource management with its cloud-based HR and payroll solutions. Trusted by over 60,000 companies, SmartHR has significantly reduced administrative overhead while enhancing operational efficiency—demonstrating how digital solutions can transform traditional business functions.

2.6. Preferred Networks

Last but not least, among the top Japanese tech companies, Preferred Networks is a trailblazer in the fields of deep learning and AI. By developing cutting-edge AI applications for robotics, manufacturing, and healthcare, this Japanese tech company is setting new industry benchmarks and showcasing Japan’s prowess in engineering and innovation.

These startups are true examples of the innovative spirit thriving in Japan. Their success stories not only inspire foreign entrepreneurs but also provide invaluable insights into the kind of disruptive ideas that can turn challenges into opportunities.

With these snapshots in mind, let’s now explore some strategic insights for successful market entry and growth for startups in Japan.

>>> Read more: Your guide to open online business in Japan

3. Strategies for Successful Startups in Japan

Navigating Japan’s dynamic startup landscape can be challenging—but with the right strategy, you can turn these challenges into stepping stones for success. In this section, we dive into actionable steps that help you tackle key hurdles, secure the right resources, and ultimately set your startup in Japan on the path to success.

3.1. Overcome legal & regulatory hurdles

When entering the Japanese market, the legal and regulatory maze is one of the first obstacles you'll have to face. Japan’s business registration process, strict compliance standards, and visa requirements can feel like a complex puzzle, especially for foreign entrepreneurs looking to launch their startups in Japan.

Here are some actionable steps to make the process more manageable:

• Research official guidelines: First off, start by consulting resources such as the Japan External Trade Organization (JETRO) and local government websites to understand the basic legal requirements and timelines.
• Prepare a detailed checklist: Next, create a checklist of necessary documents, including Articles of Incorporation, personal identification, proof of address, and other required paperwork. This helps ensure nothing is overlooked.
• Engage local expertise: Then, you should consider consulting with a local legal advisor or business consultant who specializes in company registration and compliance. Their guidance can simplify the process significantly.
• Plan for visa and residency requirements: Finally, familiarize yourself with the visa options available for foreign entrepreneurs and start planning early for the necessary documentation and approvals.

3.2. Secure funding and manage risks

Once you manage to overcome legal hurdles, it’s time to plan on funding for your Japanese startup. 

Funding is the lifeblood of any startup, and in Japan, attracting investment can sometimes be a challenge—especially for foreign entrepreneurs. As said, Japan’s investment culture tends to be more cautious, and startups often face hurdles in securing the capital they need to scale.

Here are some practical steps to help you navigate the funding landscape:

• Develop a robust business plan: At this stage, clearly articulate your value proposition, market potential, and revenue projections. A strong business plan can significantly improve your chances of securing investment.
• Identify diverse funding sources: When funding for startups in Japan, do look beyond traditional venture capital— be it government grants, angel investors, or international funding opportunities. Networking with investors who understand the Japanese market can also be invaluable.
• Prepare financial documentation: Also, ensure your financial records, projections, and due diligence materials are up-to-date and ready to share with potential investors. Transparency builds credibility, and it also applies to funding for your Japan startup company. 
• Assess market entry risks: On top of these preparations, don’t forget to conduct a thorough risk analysis that covers competition, market saturation, and regulatory changes. With this assessment, you can fine-tune your strategy and budget for unforeseen challenges.

3.3. Leverage cross-border eCommerce

A game-changing strategy for startups looking to expand in Japan is to leverage cross-border eCommerce. This approach not only opens up new revenue streams but also enables you to tap into a broader, global customer base. Let’s explore this strategy in two parts:

• The role of cross-border trade in Japan’s startup success

Global eCommerce is reshaping markets worldwide, and Japan is no exception. With an increasingly digital-savvy consumer base, Japanese startups are finding that cross-border trade offers tremendous opportunities for growth. By expanding beyond domestic markets, startups in Japan can diversify their revenue streams, reduce reliance on local competition, and tap into international trends.

For example, digital marketplaces and innovative fintech solutions are proving that Japanese startups have the potential to compete on a global stage. As consumers worldwide become more comfortable with online transactions, the opportunity to sell products or services internationally is growing rapidly.

• Ezbuy: Your strategic cross-border partner

That said, as exciting as these international opportunities are, choosing the right cross-border eCommerce partner can be a daunting task. With so many options out there, finding a solution that truly simplifies logistics, payments, and customs processes is critical for any startup aiming to scale globally.

That’s where Ezbuy comes into play. Designed specifically to break down the barriers of international trade, Ezbuy offers a comprehensive suite of services that make cross-border expansion feel effortless. 

Here’s why Ezbuy is the ideal solution for your startups in Japan:

• Streamlined logistics: Ezbuy’s extensive network covers Japan and over 220 countries, ensuring that your products are shipped quickly and reliably. With Ezbuy, you can bid farewell to delays and complex shipping hassles.
• Secure payment processing: With robust, secure payment solutions, Ezbuy simplifies international transactions, giving you peace of mind and allowing you to focus on growing your business.
• Expert customs & warehouse management: Navigating customs and managing inventory can be tricky. Ezbuy handles everything from customs clearance to warehouse fulfillment, so you can concentrate on what you do best.
• Integrated platform & data-driven insights: With a user-friendly interface that integrates order management, shipment tracking, and payment processing, Ezbuy provides real-time insights that help you optimize your supply chain and make informed decisions.
• Dedicated support: Ezbuy’s expert team is always on hand to provide personalized assistance and ensure your cross-border operations run smoothly.

Ready to unlock the full potential of global expansion and grow your startups in Japan efficiently? Contact Ezbuy and experience a seamless path to international success!

4. Bonus: Step-by-Step Guide to Establishing Your Startup in Japan 

With these strategies in hand, you’re well on your way to turning challenges into opportunities and scaling your business for success. Next, we’ll explore a bonus section that offers a brief, step-by-step roadmap to establishing your startups in Japan.

Step 1: Pre-entry research and market analysis

Before making any moves, it’s essential to understand the local market. Identify your target niche, study your competitors, and analyze consumer behavior to ensure your product or service meets a genuine need. This initial research lays the groundwork for a strategy that resonates with Japanese consumers.

Step 2: Navigating the business registration process

Once you’ve done your homework, the next step is to get familiar with the formalities of setting up your startup in Japan. This means gathering all the necessary documents—such as your Articles of Incorporation, proof of identification, and address verification—and understanding the step-by-step process for business registration. Having a clear roadmap can help you avoid common pitfalls and speed up your launch.

Step 3: Building a reliable supply chain for global reach

After registration, focus on establishing a robust supply chain. A reliable logistics network is critical to meeting customer demands and scaling efficiently. Look into solutions that streamline everything from inventory management to shipping and customs clearance, ensuring you’re ready to tap into international markets.

The concise yet sufficient guide above offers a taste of what it takes to launch a Japanese startup. For a more detailed walkthrough, be sure to check out our comprehensive guide on company establishment in Japan.

>>> Read more: How to Successfully Sell in Japan - A Detailed Guide

5. Startups in Japan: FAQs

• Is Japan good for startups?

Absolutely. Japan’s startup scene is evolving rapidly, with government incentives and growing investor interest paving the way for innovation. While the market has its quirks—especially in navigating legal and cultural norms—it offers a solid foundation for those willing to put in the work. 

And if you're looking to launch a startup in Japan, a partner like Ezbuy can help smooth out cross-border logistics so you can focus on growing your business.

• How many start-ups are there in Japan?

Japan’s startup ecosystem is on a steady upward trend, with estimates suggesting tens of thousands of startups across various sectors—from fintech and robotics to eCommerce and beyond. This impressive figure reflects a surge in entrepreneurial energy and a growing commitment to innovation throughout the country.

• Is it hard to start a business in Japan as a foreigner?

Lauching a startup in Japan as a foreigner does present its challenges. The intricate legal requirements, extensive paperwork, and cultural nuances can feel overwhelming at first. However, with thorough research, local expertise, and a well-crafted strategy, these hurdles can be overcome. 

Plus, when it comes to managing international transactions and logistics, Ezbuy can be a game-changing asset—helping you navigate the complexities of cross-border eCommerce so you can concentrate on building your business.

Final Words 

In summary, the world of startups in Japan is brimming with potential. Whether you're launching a new venture or expanding an existing business, understanding the unique challenges—from legal complexities and funding hurdles to operational intricacies—is essential for success in this dynamic market.

Ezbuy is here to help you bridge the gap—streamlining logistics, payment processing, and customs clearance so you can focus on growing your business. Ready to take your startup to Japan and beyond? Get started with Ezbuy today and transform your international expansion into a smooth, efficient journey.

Website: https://ezbuy.jp/en

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