Japanese investment into Europe tech is accelerating, with about €33 billion invested in European start-ups and scale-ups since 2019 and another €3 billion projected by the end of this year. That's according to a new report by NordicNinja and Dealroom, which highlights growing investor interest in Europe's deep tech and AI sectors.

Tokyo

Japanese investors have significantly increased their investments in European startups and scale-ups, reaching €33 billion since 2019, with an additional €3 billion projected by the end of the year. This trend is driven by a shift from Silicon Valley to Europe, as Japanese corporations seek opportunities in deep tech, climate tech, and artificial intelligence, motivated by shared societal challenges and the implementation of the EU-Japan Economic Partnership Agreement.

The United Kingdom stands out as the leading European destination for Japanese investment, attracting nearly €15 billion due to its strong innovation ecosystem and close ties with Japan. Geopolitical considerations and interest in defense technology are also influencing investment strategies, with expectations for continued growth in both AI and defense-related sectors over the next several years.

Japanese investors pouring cash into European AI and deep tech

Looking also at Japanese investments. They actually are increasing when it comes to their position in Europe. So Japanese investment into Europe is on the rise with about 33 billion euros invested in European startups and scale ups since 2019 and the further three billion euros projected by the end of this year. This is according to a new report by Nordic Ninja and Deal Room which says investors are increasingly looking towards Europe's deep tech and AI sector. Now this is something that we don't hear very often. So let's discuss it with our next guest. Tomosaku Zuhara managing partner at Nordic Ninja is earning this morning. Good morning. Thanks for being in the studio with me today. Thank you for having me. About some of these numbers. Very interesting story overall. But I would like to start the conversation just understanding what are the reasons behind increasing investments in European tech. Yes. So as you mentioned the since 2019 33 and the billion the euro of the Japanese capital has been inflow to the European startup. So why the 2019. So this is the year that we establish a Nordic Ninja. This is the first Japanese pure Japanese back to venture capital in Europe. Focus only on the Europe. And also that the European Japan economic partnership agreement I mean came into the force. So that's why I mean this is happening. But before that I mean if we took if we take a look I mean a little bit more. But the Japanese company Japanese investors are very active and investment in the Silicon Valley. So the majority of the Japanese corporation established a CBC in the Silicon Valley. So they put a lot of money as they come towards the capital. But they realize I mean it didn't come anything from the Silicon Valley. And they're looking at the Europe. We clearly see that. I mean the Japan and Europe I mean shared a lot of like a structural realities. For example I mean resource discursive aging society and also the exposure of the geopolitical risk. So that's why they are thinking hey maybe I'm the Europe is a good market for the Japanese investor. Japanese corporate to make invest or make a collaboration. So mainly focus on deep tech climate tech and AI. So is this more because you see similarities in terms of the way you know a bit of cultural thinking in terms of the offer in this space. What what makes Europe so different from the United States or China when the AI race is a lot more developed than in Europe. Yes. And because the difference of the Europe is a pretty fragmented. I mean yes of course the EU. I mean wanted to be realizing this is kind of a one countries or. But I think that we cannot see the Europe as a kind of single market. Yeah. So still like a fragmented. And then compared to the U.S. and China they have a big market and the American entrepreneur like a Chinese entrepreneur. They don't need to focus on the global market. They just focus on like a local market. But Europe needs to have like another like a market. So that's why from the Japanese corporate perspective I think it's quite meaningful to collaborate. And also the European entrepreneur wanted to enter the Japanese market as an entry point to expand their operation. Let's discuss the fragmentation a little bit on the European continent. I noticed that the UK is actually leading the charge when it comes to Japanese investments on the continent at about fourteen point nine billion euros. Walk us through the differences between the UK and Europe. It's just a question of how much offer there is. Well of course I mean the UK is the most prominent. I mean one of the most prominent country in terms of innovations. And then in the Japan and the UK Japan and the UK has a very much stronger relationship compared to the other countries in the area in Europe. So I mean I think that Japan see the you the UK as a kind of first countries when we when they think about the European market. So the not only a soft bank but also like I mean Sony. I mean there are quite many like a Japanese big corporate. They decided to make an investment. I mean starting from the UK. So especially for the deep tech and also the A.I. companies. And because there are so many deep tech companies currently coming from like I mean scientific background also like a great university like a Cambridge and Oxford. So that's why I cannot deny that Europe is what I mean. The UK is one of the most prominent countries for the Japanese market. I'm also curious to understand whether there's a geopolitical element. Yes. Walk us through that then. Well this is this is a bit tricky. I mean the people some people say that for example I got Finland and Estonia. I mean we are the neighbor in Japan. We have just one big country in between. So yes I mean Japan is exported a lot of geopolitical tensions. And at the same time still defense technology. This is kind of quite controversial area in Japan. So that's why Japan wanted to learn how to Europe adapt to this kind of defense technology or how they address geopolitical tensions. That's why they are very hungry to run the ecosystem from the Europe. Does that mean that your expectation is that the level of investment will increase even further over the next four or five years. 100 percent sure. Yes. Not only the A.I. sector but also I mean tell us maybe defense sector. Again depend on like applications. For example when we look at the drone technologies and we can be useful for like a normal application but also they can be useful for the defense sectors. Well we look forward to tracking that upcoming investment as well. Thank you for joining us this morning. All right. Thomas Saku. So our managing partner at Nordic Ninja.

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