Disrupting Japan

Japan has one of the longest lived and healthiest populations in the world, and let Japanese startups are playing a relatively small role in the recent longevity-tech boom. The longevity market includes everything from health-tech wearables, to foods and supplements, to lifestyle coaching, to invasive medical procedures. The offerings themselves range from the incredibly useful and helpful to the wasteful and the outright dangerous. To make sense of all this, today we talk with Bilal Kharouni the CEO of Ekei Labs, who explains his startup's pivots through multiple sectors of the budding longevity market. It's a great conversation, and I think you'll enjoy it. Show Notes What exactly is “biological age” Where health tracking apps are useful and where they are dangerous How to market supplements in Japan's tightly regulated  market The business and medical challenges in direct-to-consumer health tech Pivoting from supplements to consumer test kits to research The path for commercializing  today's university medical research Business models that work for startups in medical research Advice to founders coming to Japan to start a startup How to sell in Japan with limited Japanese abilities How foreign founders can recruit Japanese advisors for their startup How Japan’s new via restrictions will affect foreign entrepreneurs in Japan Links from the Founder Everything you ever wanted to know about Ekei Labs Connect with Bilal The Aging Consortium is work on the clinical translation of the biomarkers of aging Life Biosciences is developing epigenetic reprogramming (gene therapy) protocols Leave a comment Transcript Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs. I'm Tim Romero and thanks for joining me. Japan is one of the longest lived populations in the world, and as you get older, well, you start thinking more and more about getting older. Of course, getting older is much better than the alternative, but we all want to slow it down a bit and do it in a healthy way. Now those of you who know me won't be surprised to learn that once I got interested in this topic, I got a little obsessive. I have a smart scale and a smart watch and a smart ring all confidently telling me slightly conflicting things about the state of my health. And anti-aging startups are a mixed bag at best, ranging from difficult, boring, but very effective medical advice about diet and exercise to fund cutting edge wearables and trendy supplements and treatments that are a complete waste of money and everything in between. Well, today we sit down with Bilal Kharouni, the CEO of Ekei Labs, who's going to help us make sense of all this. Now, the Ekei Lab's journey and their pivots while trying to find product market fit in the anti-aging market is really a microcosm of the whole wellness industry from supplements to consumer facing tech to medical research to well, I’ll let Bilal explain where it all ends. Now, interestingly, Bilal and I had this conversation in Okinawa, home of Japan's longest lived population. And we talk about finding product market fit in health tech, how to sell to Japanese enterprises when your Japanese ability is limited, and how Japan's new visa restrictions are going to impact startups here. But, you know, Bilal tells that story much better than I can. So, let's get right to the interview. Interview Tim: I'm sitting here with Bilal Kharouni, the founder and CEO of Ekei Labs, who's selling direct to consumer longevity testing and support services. So thanks for sitting down with us. Bilal: Yeah, thanks for having me. Tim: Now you're based in Tokyo, but we're sitting here in Okinawa today. You've recently joined the OIST incubator, so tell me about that. Bilal: Yes, we work on aging and longevity. So for us, there's not a better place than the blue zone of Okinawa to really sit our lab and working on aging. Actually, we pivoted quite a lot from direct to consumer longevity tests. So we really have a platform that is more intended for joint research. We went much further in terms of research, so having both the lab and the talent and also the perfect location too. Tim: Well, I mean Okinawa famously as one of the longest lived populations in the world. Is that coincidence or does that inform your research in some ways? Bilal: So, it's pretty consciously I will say, the reason why Okinawa and people live the longest are part due to diet or social activities being surrounded by their loved ones, which is great. But what we're investigating is mostly therapeutics to increase healthy lifespan. So, it's a deep tech zone I would say. However, for people who have an interest in longevity and living longer and who wants to work on these topics, it's a very attractive location and it's an attractive location for hiring some of the best people. We had the chance having members quitting the job for Tokyo to join us in Okinawa to work with us. Tim: Well, I can certainly see the appeal of coming to work here. So, let's talk about biological age. Because this is something that fascinates me. But what exactly is it, like my smart scale at home tells me about biological age. I think this wearable also will give me a biological age, but what exactly is it? Bilal: So, it's a very interesting question, and that can be quite confusing for many people because as you're mentioning, you have so many different biological age for one chronological age. So, it's really looking at the spectrum. So that can be, for example, your cardiovascular health, your fitness or any kind of biomarkers and see how you benchmark compared to rest of population. So, you might be 32 years old, but for example, your cardiovascular system might correspond to a healthy individual of 18 years old. So, you could say that your cardiovascular health is of someone of 18 years old and… Tim: But is it something that is scientifically defined? Is there like an accepted way to measure these biomarkers and calculate it this way? Is there an accepted scientific consensus about how to calculate it? Bilal: There is not a scientific consensus yet and that's actually big challenge in our industry. We have different ways of measuring chronological age using, for example, evidence marker, glycome marker proteomics, and the big question in which ones have a clinical translation. Because I can give you a chronological age, but if it doesn't mean anything in terms of risk of the disease or physical conditions, it's frankly huge metrics. Tim: I'm also curious about. Okay, not necessarily the way you calculate it specifically, but industry-wide. So, when biological age is calculated, is the actual chronological age always used as an input or can it be calculated independently or is it more of like an adjustment factor? Bilal: So when you do the algorithm, you have a dataset with the metadata sets with the gender, that helps calibrate the chronological age. And ultimately you would want when you take input from a patient not knowing the chronological age and estimates the biological age independently of the chronological age and industry-wide, there are different clocks. And now there's a huge work for having this clinical and scientific validation. So each year, actually I'm going to Boston in October for the biomarkers of aging symposium that takes place at the Harvard Medical School. So that's really ongoing discussions in the field. Tim: So your offering also involves a mobile app? This app provides insights and advice on how people can improve their biological age. So, what kind of insights and what kind of lifestyle changes does it recommend? Bilal: So for the app, low hanging fruit for someone like the diet, sleep, physical activity, and we put this app for use for clinicians and they can be also very helpful for the clinicians who have both a surgical age metrics as well as information the lifestyle of their patients. Because can be quite difficult for the clinics to know how well the patient eat or sleep. And then the medical doctor can really guide the medical journey to help them in their longevity medical journey. Tim: So, what are the biomarkers you're looking at? I mean, you've recently been selling like a home test kit for that's like a blood sample. So, you've got the blood test and what other information goes into the calculation? Bilal: So we have two type of product services. So, the one actually describes is for our individual use and we use a biomarker called IgG glycome. And what is amazing with this biomarker, it is that is very responsive to interventions, an intervention of eight to 10 weeks and do another test. You can see a data, you can see a difference in this biomarker like, and what is also great with this biomarker that is extremely linked with chronic inflammations and chronic inflammations are linked with a myriad of chronic disease. Tim: So, is that like just a coincident marker or is that actually directly related to biological aging? Bilal: That's a great question. Menopause is probably one of the condition that is the most linked to medical aging. And when we say that so many times it's misdiagnosed and mis-documented. So, having ways of getting the early science through this IgG glycome measurements and then having better medication or better health optimization or better response from the medical doctors, we think is extremely important. And probably the first longevity drugs that we could see on the market will be a drug targeting menopause and perimenopause. That may be one of the first age related condition that we might be able to treat one day. Tim: Excellent. Let's take a step back for a minute and kind of talk about how Ekei Labs came to be and how we ended up in this room having this conversation. So, you actually launched in 2019 with a completely different business model.

Chiamin Lai, a general partner at Firstlight Capital focusing on physical AI in Japan, shares insights on Japan's struggle to maintain its robotics leadership. She discusses the impact of the labor shortage on AI adoption and highlights the need for industry collaboration. Chiamin also explores the disconnect between generative AI and robotics, advising startups to concentrate on vertical, task-specific robots. She predicts a future where Japan's unique solutions dominate the global market while cautioning against heavy hardware investments.

In this engaging discussion, Shri Dodani, a serial entrepreneur and co-founder of Global Hands-On VC, reveals unique insights into Japan's startup landscape. He explains the reasons behind Japanese VCs' reluctance to invest locally, despite the market's potential. Shri also shares the importance of nurturing 'attitude' in founders and how cultural differences impact execution. He highlights promising sectors like quantum computing and deep tech, while emphasizing the need for role models to inspire a new wave of global-minded entrepreneurs.

Taro Sasaki, founder of Hacobu, aims to revolutionize Japan's struggling logistics sector through digital transformation. He discusses the impending collapse of the industry, fueled by a dwindling driver workforce and outdated practices. Taro reveals how new regulations are turning the tide for modernization and shares insights on selling innovations to traditional businesses. He reflects on the deep value hidden within logistics data and stresses the importance of dreaming big in an industry resistant to change.

Reiji Yamanaka, managing director of the Kibo Impact Investment Fund, and Kelvin Song, program director of the Globis MBA program, discuss the evolving landscape of AI startups in 2025. They explore key business models, sustainable revenue strategies, and the critical importance of innovation in industries like accounting and legal tech. The duo addresses the transformative role of AI in app development and its implications for job markets, emphasizing the need for creative problem-solving in Japan's unique societal challenges.

Japan's declining birth rate makes global headlines, but most of the developed world will soon be facing the same problem. The real solution involves a lot of social and economic changes, but as you'll see, technology has a huge role to play as well. Today we sit down and talk with Kaz Kishida, CEO of Dioseve, about how their technology promises to transform IVF, the rapid timeline for global rollout, and safety issues and ethnical questions involved. It's a great conversation, and I think you'll enjoy it. Show Notes How Dioseve will make IVF far more successful Why over 7% of all babies born in Japan are from IVF Bio tech CEOs don’t need life science degrees Safety concerns Applications to rejuvenation and ani-aging Ethical questions around this kind of reseach Japan’s policies towards stem cell and genetic research Roadmap and go-to-market Why some babies will have three parents, and what that’s good How Dioseve's ovarian cell technology will change IVF Why Japan’s bio tech ecosystem remains under-developed It's not harder to build a bio tech startup in Japan, but it is different Links from our Guest Everything you ever wanted to know about Dioseve Friend Kaz on Facebook Leave a comment Transcript Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs. I'm Tim Romero and thanks for joining me. Today we're going to talk about making babies. Now, this is not something that startups or startup podcasts normally weighed into, but as you'll see in this case, it makes a lot of sense. Today we sit down with Kaz Kishida, co-founder and CEO of Dioseve. And Dioseve has developed a technique for growing mature human eggs from IPS cells. Now, this technology represents a huge step forward for IVF and for human fertility in general. Some parts of Dioseve’s technology could be in commercial use as soon as next year. Now, kaz, I dive deep into Dioseve's technology and the potential good it can do and why some future babies will have three parents. We also cover the tricky ethical and safety issues involved, and we explore exactly why that, in spite of all Japan has going for it. The biotech startup ecosystem here is still facing challenges. But, you know, Kaz, tells that story much better than I can. So, let's get right to the interview. Interview Tim: So, we're sitting here with Kaz Kishida of Dioseve who's helping to address fertility by using stem cells to create fertilizer eggs. So, thanks for sitting down with us. Kaz: Thank you very much for having me. Tim: Now I gave a very high level description of what you do in the intro, but can you explain it a little better than I can? Kaz: Okay. So, our company has technology to induce IPS cells and to another types of cells, including eggs and ovarian cells. Most of their cells are related to germ cells and reproduction. Tim: Well, this technique's not yet used in fertility treatments. But it's something in the future that holds a lot of potential. Kaz: Right, right. Currently, like In Vitro fertilization, the success rate is still remarkably low. And sometimes that vitamin journey is tough. But if we can deliver our products, say IPS cell derived ovarian cells, then the IVFs will be more accessible and the success rate will be enhanced so many women and can have their children using our technology. Tim: So why would the success rate be enhanced from using these eggs produced from stem cells as opposed to eggs harvested from the women directly? Kaz: So, in the standard protocol of In Vitro fertilization, the first step is to retrieve eggs from women. And then in many cases, those eggs are immature and immature eggs can't be fertilized with sperm. So, we can mature those immature eggs and we can make mature eggs, which can be used for fertilization. So, it directly enhance their success rate of IVF. Let me clarify that. And we have two technologies. The first one is create egg itself, but the other one is create ovaries, ovarian cells from IPS cells. Of course, if we create eggs, we can use those eggs for fertilization directly. But the other product, IPS cell derived ovarian cells that can support current In vitro fertilization procedure. Tim: And actually I was surprised at how common IVF is in Japan. Kaz: Yes, yes. Tim: 7% of all babies are born from IVF now. Kaz: Right, right. Over 60 K babies are born by IVF. Tim: So, what's driving that trend in Japan? Kaz: Strong tendency is increased age of married and having the first child. Before time, there are average was 29 years old, but now, and the first baby will be born in later stage of women's career and life stage. Of course the age is strongly rated to the pregnancy, and it is getting harder to get pregnant when women ages. That is biggest reason. Tim: It seems like Japan is really number one in the percentage of IVF births. But is the average age that women have their first children significantly higher in Japan than other nations? Kaz: Comparing to the US, yes. Their first child comes in the later stage for women. Tim: Oh, okay. Well, before we get deep into the technology and your go-to market plans, I want to take a step back and talk about you. So, you graduated from Waseda back in 2020, you went into investment banking. And so what led you from investment banking into Dioseve? Kaz: The fact is I already decided to start my own company when I was in my high school. And when I was in my university, I experienced some internships in some startups. And after that I noticed that their main job of CEO in a startup is to raise money. Tim: That's an important one. Yeah. Kaz: Yes. And I thought, okay, what is the best way to learn finance? I thought, okay, investment banking. That's why I decided to go investment bank. Tim: But that didn't last very long. Kaz: Yeah, I'm sorry for the company, but I learned finance, and I exited. Like I resigned. But I already declared that I will have my own company in the near future when I got an interview. And the company said, okay. Yes. So yeah, I joined them. Tim: So they probably just didn't think it was going to be in like two years. Kaz: Yeah. Tim: So, how did you come together with Dioseve? Why this area? Kaz: Okay. As I said I decided to start up my company when I was in my high school and I was diagnosed with Hepatitis C, and there is a kind of potential liver cancer. And my parent had that disease, and back then there was no treatment. But the doctor said, in three years, the new drug will come to Japan. And I waited for three years, and the doctor said, yes, now we have the treatment. And surprisingly, the drug has super good effect on hepatitis C. Actually, I, my parent and my grandparent all totally cured. So, I was amazed and I felt, okay, my life was saved by biotechnology. So, it's turn for me to save others by starting new biotech company. Tim: What did you study medicine or biology at university? Kaz: No. I studied geology. Tim: Geology. Kaz: Yeah. Totally different. Tim: Alright. So, how did you meet your founding team members? Kaz: VC called ANRI introduced me to Dr. Hamazaki, and we got along together and I said, okay, how about establishing our company? And he said, yes, let's do that. Tim: So, of the founding team, are you the only one without a medical background? Kaz: Right. Tim: It's just you. Kaz: Yeah. But as you can imagine, the finance is super important for startup. Tim: Well, no, I think that's a really important step. In fact, over the last 10 years in particular one of the most important things I've seen for Japan's deep tech startups is that, I mean, 10 years ago, it was just kind of assumed that the professor would be the CEO. Kaz: Yes. Yes. Tim: And that's changing, and that's a terrible model because academics tend to be horrible CEOs. That seems to be changing recently. Kaz: Yes. I think so. Tim: Let's talk a little more about the technology and the positioning in the market. Women in developed nations around the world are having children later in life. This is such an important social problem everywhere. And IVF was first introduced in the 1980s, and it's been hugely successful, but it doesn't seem like we've seen a whole lot of innovation in the last 40 years. Why is that? Kaz: You're correct. First of all, the invention of IVF was super innovative. After that, there was not many rooms for improvement because get eggs, fertilize is just super simple. But there was not many things we can do for that process. But the last and biggest room was maturation because eggs can be functional only after getting matured, IPS cell technology enabled to do that. Tim: So other than that, maturation, everything else about the system is pretty optimal. Kaz: Every doctor has their own opinion and every doctor thinks their protocol is optimal. But at least like ICSI, ICSI is a second innovation I think regarding IVF. ICSI is a kind of procedure which inserts sperm to eggs directly. Before time we just put sperm and egg to one dish and waiting for the fertilization. But in 1990s they did ICSI and that dramatically enhanced and the fertilization rate. Tim: So, what are the main sort of safety concerns around this kind of a technology? Kaz: The biggest one is genetic manipulation from their natural born babies. But fortunately we have technologies to assess the situation of in genetic expression. So, we can precisely evaluate abnormality. Tim: Okay, creating the mature eggs from stem cells is pretty amazing, and it has obvious applications to fertility treatments. So, I'm just curious, does the technology of other medical applications outside of fertility? Kaz: Yes. We have. So one example possibly of topic, but we can use this for rejuvenation. So, we can reverse on the age of cells by using our eggs. So, this is very conceptual stage, so I can't say, yes, we can do that.

Last month I spoke on a panel about the future of climate tech. I was joined by Emi Naganuma, the founder and General Partner of Apprecia Capital and Richard Youngman, the CEO Cleantech Group, with Michael Matsumura of Scrum Ventures moderating. Right now is both a challenging and an exciting time for climate tech innovatoin. It's a fascinating discussion, and I think you'll enjoy it. Leave a comment   Transcript Welcome to Disrupting Japan, straight talk from Japan's most innovative founders and VCs. I'm Tim Romero, and thanks for joining me. I've got another quick in-between episode for you today. It's a great conversation about deep tech startups and the future of energy. I was part of a panel discussion organized by Scrum Ventures at the Sakura Deeptech Shibuya Conference. It was moderated by Michael Matsumura of Scrum Ventures, and I was joined on stage by Emi Naganuma, the founder and general partner at Apprecia Capital, and by Richard Youngman, the CEO of the Cleantech Group. We talk about the best way to raise venture funding as a deep tech startup, how enterprises and startups can better collaborate the important gaps we see in the green tech ecosystem and the somewhat controversial future of using ammonia and hydrogen as alternative fuels. So, let's get right to the panel.   Discussion Michael: Thank you much for our panelists. Maybe I'll just kick it off. Maybe you could start with Richard. Could you talk a bit about like what you're seeing globally in terms of where the dollars are flowing now? Has that changed like in the last like six months, one year from what you're seeing? From your perspective? Richard: It hasn't changed radically yet, but it made it. So, I think if you go into Q1, clearly the deals in progress and so forth, some of which may have fallen apart, but some of which happen. I don't think the community in the US judging by our conference the year before was expecting the inflation reduction act to be sort of aggressively taken apart as it was. Meaning if something was already a deal was done and it was expected to continue. And so that's obviously created a lot of back backtrack there. But geographically, I would say we're still to see that. I guess the second comment might be in our 20 years and why really we're excited to be in this part of the world more and more is because we believe that innovation under this theme is coming from everywhere and should come from everywhere and needs to come from everywhere. This is not as Silicon Valley phenomenon. Silicon Valley has a role to play but so does everywhere else. And so I think long term we're expecting to see capital allocation change quite a lot. Michael: Great. Then maybe staying on that sort of the macro theme maybe I could go to Emi obviously like on a similar topic, but in terms of like your limited partners, like the discussions you're having with your investors, like has there been a change in tone? Is it like in different sectors you guys are interested in or the partners interested in? Could you maybe touch upon a bit about that? Emi: I think from the expectations from the investors, the LPs into the fund I see that they have shifted their interest into deep tech incredibly especially university or research driven. So, really deep tech and clean tech in terms of geography as well. I think a lot of attention has been in the US but now it, we do see more attention coming into Europe. We see US VCs also emerging into Europe. Before it was series B or series C that they came into. Now, early stage, I think from seed we kind of see some US VCs coming in and trying to getting into the deals. And I also see a shift of students coming in to study in Europe, but yes. Michael: And in terms of your LPs, are they mostly Japanese or are they a mix of like global LP bases that you have? Emi: We have Japanese corporates as LPs. Michael: Thank you. Then maybe Tim, to your perspective, maybe also as JIRA, like you make one third of it a pound in Japan. But like you obviously have global operations. You've got like IPP businesses across Asia and also US as well. From like your perspective, how's the changing sort of landscape impacting the way how JIRA Ventures makes investments right now as well? Tim: So, energy is a global market and I think that to your point, you have to be globally minded. And I think when the IRA passed in the US a few years ago, there was this tremendous movement of innovative companies from Europe to the US. We're starting to see that trend reverse, and a lot of them are going back to Europe, but even within the US, I think for example, my own companies have been enterprise software. And you can go to San Francisco and understand 80, 90% of what's going on in the world of enterprise software. You can have your finger on the pulse never leaving that area. Climate tech energy's not like that, there's a lot more going on globally, even in the US I think Boston is more innovative than San Francisco, but there's a lot going on in Europe and a lot going on in Australia. There's a lot of promising startups in Japan as well. So, these things shift. If innovation in the US slows down, there's a lot of other places that'll pick up the slack and it seems like they're already doing so. Michael: Great. Thank you. Then maybe just diving a little bit deeper into some specific technologies or themes maybe as well. I think Richard gave a good overview of the sort of the, maybe the booms and buses the wrong way to put it, but like some hot sectors and less hot sectors. Maybe we'll start with Emi again then. What are the sort of areas that you see as very attractive right now? Like where do you think you'll get good returns looking for like what excites you right now? Emi: In terms of return and of course impact, we look at it into two kind of segments. First is where there's a high environmental impact right now that exists. So the large sectors, and usually these aren't so many, it's construction, agriculture, energy, concrete, et cetera. And then we look at the other one that is where there aren't so much of an environmental footprint yet, but that industry will grow and we think that's really, really interesting. And Richard has already highlighted, but we think the AI infrastructure space is going to grow. So, we're looking highly into that. It is becoming a competitive space and also we look into space tech because that is really interesting as well, and it can provide solutions in climate tech that we haven't seen before and that could provide solutions that we couldn't even think of. Michael: Yeah, I like the impact perspective is really important. And personally, I always thought that the industrial decarbonization never attracted enough capital, like given the emission level. So that's always a sector that I've always liked. Then maybe, Tim, to your side, I think JIRA's had a big focus on looking at hydrogen and sort of ammonia and I know there's been talks about using ammonia in sort of coal fire power plants like coal fire, coal firing, and then looking at sort of gas turbines using hydrogen as well. And obviously as Richard highlighted earlier hydrogen's kind of lost a bit of steam lately. In terms of the investment cases right now, is it still a viable sector that we should be looking at? Does it still have a -- what's your perspective there? Tim: Well, I think it depends on your time horizon and your investment objectives. So, as a VC with a seven year fund, I think it's really hard to invest in hydrogen. As an energy utility or as a nation who needs to have a secure power grid, it is essential to continue investing in alternative fuels. Because in the long term, even if we get a very green grid, we shut down all the coal, we shut down all the gas plants, we get to Carbon zero eventually, the Germans have a wonderful word called Dunkelflaute. And it means when the sun's not shining and the wind's not blowing. And right now we've got batteries that'll do eight hour storage, no problem, maybe 12,24. There's some promising things that'll go to a hundred hours plus. But at some point, there's going to be a few weeks or a month where you've got the Dunkelflaute and you need to burn something. And that something could be fossil fuels or it could be ammonia or hydrogen that is made with excess energy when the sun is shining and the wind is blowing. So JIRA's plant, a Hekinan was the globally first successful test of a blended ammonia and coal firing, and it was 20% ammonia, 80% coal, and it was hugely successful. The engineers are saying we go to much higher ratios. So, in terms of a startup investment from a VC perspective, it's very hard to justify an investment like that. You're not going to see returns in five years or 10 years. But as a utility who's making 40 year investments and 80 year time horizon planning, it's essential. And so that's why alternative fuels be it hydrogen ammonia is really important in the midterm. I think storage is extremely exciting in all forms, whether that's lithium-ion batteries or zinc oxide batteries or these iron rust batteries or when I see EVs, basically it just looks like storage on wheels to me. So, I think that that's like, in terms of my investor brain, that's what I'm most excited about right now. Michael: Nice. Okay. I'd like to add the geothermal and maybe nuclear to that, but… Tim: No, absolutely agree. Absolutely agree. I mean, JIRA doesn't do nuclear, so JIRA doesn't have an official opinion on it, but I think it's pretty clear from all available analysis that there's no practical path to net zero without a lot of nuclear on the grid. Michael: Yeah. Thank you. Then Richard, maybe to you obviously Cleantech group, you guys research and you look at so many different companies across the world. What are the sort of most under the radar sort of technologies and sort of sectors that interests you or excites you right now?

Sandeep Casi is a Partner at Antler Japan, where he shapes startup innovation and supports early-stage ventures. In this insightful discussion, he reveals how foreign founders are transforming Japan's startup scene and overcoming barriers. He debunks the myth about Japanese founders' English skills and sheds light on the unique challenges of university spinouts. Sandeep also discusses the surprising success rates of Japanese startups compared to their global counterparts, driven by a bottom-up approach to entrepreneurship.

Progress is not only slower in Japan, it is often different. Looking at the numbers, it's clear that venture capital is even more male-dominated in Japan than it is in the West. Our guest today explains not only how that's changing, but how she's changing it. Sophie Meralli is a Partner at Shizen Capital and co-founder of Tokyo Women in VC. We sit down and dive deep into the keys to developing a creative, global mindset among Japanese founders and VCs, the role immigrants have to play in developing Japan's startup culture, and what really works in changing, not only minds, but actions related to the role of women in startups and venture capital. It's a great conversation, and I think you'll enjoy it. Show Notes The kind of startups Sophie and Shizen are looking for Why Japanese AI startups need to be especially careful The percentage of Japanese VCs are women, and how it's changed over the past 5 years Why more and more VC funds are being started by women in Japan What Women in VC does, and how you can get involved The main things holding back women in VC in Japan today The critical next steps for women in VC Is it easier for foreign women to defy gender stereotypes? Are Japanese women founders making faster progress than women VCs? What a “global mindset” really means for startups How to develop cultures of creativity and innovation Links from our Guest Everything you ever wanted to know about Tokyo Women in VC Tokyo Women in VC Job Board Tokyo Women in VC Research: The 7 Stats Shizen Capital Friend with Sophie on Facebook Follow her on Twitter @Soph_VC Info on rate of Japanese Passport holders Leave a comment Transcript Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs. Finance and venture capital in particular has always been male dominated, and in Japan, well, it's even more so, but things are changing here and not quite in the way you might expect. Today we sit down with Sophie Meralli, a partner at Shizen Capital, and co-founder of Tokyo Women in VC. And we have a frank discussion about what it's really like for female founders and venture capitalists here in Japan. And some of it is surprising. In some areas it seems that Japan is ahead of the west and in others, well, not so much. The conversation is at times both frustrating and hopeful. Sophie explains the one thing holding female VCs back more than any other, how things are changing for female founders and for male founders as well, and why so many new Japanese venture funds are being founded by women. But you know, Sophie tells that story much better than I can. So, let's get right to the interview.   Interview Tim: So we're sitting here with Sophie Meralli, a brand new partner at Shizen Capital. So, thanks for sitting down with me. Sophie: Thank you so much, Tim. It's a pleasure to be here. Tim: You're not new to VC, but you're new to Shizen. So, tell me a little bit about your new role, what kind of things you're looking for. Sophie: Yeah, sure. For me, it's kind of interesting because I was in early stage in Boston and then when I came back to Japan, I was with Eight Roads Ventures for about five and a half years looking more into growth stage startups in FinTech, Enterprise SaaS. And those are really the area that I think are super interesting to me in Japan where I see a lot of potential. And so at Shizen, given this is much more like early stage, there are tons of ideas for which there are already unicorns abroad, but in Japan, those haven't surfaced yet. And I'm really excited to either incubate new businesses or just be able to be a partner for very early stage startups in those sectors. Tim: Now, you mentioned your experience back at InSpark in Boston? Sophie: Yes. Tim: If I recall back then you were looking at AI startups and sort of the previous generation of AI startups. What's your take on the situation of AI startups here in Japan right now? Sophie: I think AI right now, industry is very, full of hype and very Agentic. Tim: For various meanings of that word. Sophie: Yes. Back in the days it was much more about machine learning and being very application driven. So, I invested, for example, in companies that help construction site being able to do inspection in a less manual way with drones and AI automation. And that enabled drop the time to do a survey from two months to 30 minutes. And that was really new at that time. We did that also for dentists. Tim: Yeah, I think that that kind of previous generation of AI was really use case focused. And there's still a lot, whether it's in like predictive maintenance, a lot of medical applications, do you see the same thing happening in the current crop AI startups, the LLM startups? Sophie: I still have to try to understand the business model and use cases. So, I'm trying to be a bit more, I wouldn't say skeptical because I'm very excited as well, but I think generative AI and it's to be taken with a grain of salt, and if you have a lot of average input, then you get average output too. So, what can really a big data set do is become average quality sometimes. So, I'm excited to learn more about the data that these startups are using and the exact use cases that they want to tackle, rather than trying to completely, fully automate jobs. I think we're still a bit far away from that, although I'm using cloud and ChatGPT every day myself. Tim: I'm the same way actually. I use ChatGTP, I use perplexity every single day, but I'm also a huge AI skeptic in terms of actually investing in the companies and whether they can live up to the hype. But actually one thing I really want to talk to you about, let's talk about women in VC. Both the organization and, well, the actual women who are in VC. So, you and Shino Furukawa founded Tokyo Women in VC a couple of years ago, back in 2020? Sophie: Yes, exactly. Tim: Tell me about the organization. What do you do? Why did you start it? Sophie: Sure. I would love to. Basically, when I was in Boston, there was an amazing women in VC community called Breaking 7% because there were only 7% decision makers that were women back in the days. And we met almost every month through dinners and exchange ideas. And it was more of a ask me anything kind of community where members come up with problems and they share it with each other. And that really helped me a lot to build my network because in the US, I knew almost like no one. And when I came back to Japan, it was 2020, it was COVID, it was very hard to network. And I felt that women were also a bit isolated. And so I discussed with a few women in VC, and Shino is a very dear friend of mine. She was actually pregnant at that time, so I felt a bit guilty to ask her to take on… Tim: More work. Sophie: My co-founder for this, but at the same time, I was like it must be her. And so she accepted and she was very enthusiastic about it. So, we launched a community in 2020 with about 30 members only. Tim: Well, and you were mentioning the 7% decision makers in the US, I would imagine that number is lower in Japan. Sophie: Yeah, so now in the US it's about 16%, 18% so a lot of progress in Japan. We are doing a survey every year since 2020. And back in 2020, the number of decision maker was about 3%, total VCs. Tim: So, what is a decision maker? Is it a partner? Sophie: Yeah. It's a partner or a GP basically someone who has a voice at the investment committee. And now in 2024, we have about 8.4% women decision makers. Tim: Well, I mean, it's low, but that's a lot of progress. In just five years. Sophie: Yes. And one interesting trend is that rather than being internally promoted, it comes a lot by launching your own fund because the fund cycles are so long, 10 years. So, there's promotion to partner or decision maker. Often when there's a new fund coming up and there's not a new fund every year, it's mostly every three, five years. So, a lot of women actually launch their own funds and that's how they become partner. Of course, there are some exceptions, which is a great sign for the ecosystem when women are also promoted internally. Tim: That is interesting. So, I mean, of course it makes sense that there'll be more women at the newer funds. Just because you don't have a whole lot of mobility in an existing fund. You just don't. But are there a lot of women raising their own funds now in Japan? Because it would seem to me that that's a lot harder than joining a fund. Sophie: I mean, so in terms of women launching their own fund, I wouldn't say that there are a lot, unfortunately, we need many more to do that, but it's growing and we're seeing a lot of women launching their own. And I think we are about 20 to 30 women who are decision maker right now in the industry. And by 2030, we want to double that to 60 or more. And we have another KPI, which is the total number of women investors, and that's now 17% of the industry. And we hope to bring that to 30% by 2030. Tim: The women who are decision makers. So, men in VC in Japan are overwhelmingly finance guys from good schools who worked at tier one companies before jumping to VC women fit the same profile, or is there more variation there? Sophie: I think a lot of women who launched their own firm come from the VC industry, or some of them finance industry as well. I see some who are actually in the startup space. Tim: So, similar profile as the male VCs, then? Sophie: Yes, I would say that there is not a trend that women have a different profile than male counterpart. That being said, when they launch their own fund, they tend to have a different lens. And I see a lot doing funds focused on women entrepreneurs or women's health or impact, ESG, but obviously there are also sectors like healthcare in general or B2B SaaS,  and we don't want to have only women VC investing in women founders.

Dai Watanabe, Co-founder and managing partner of Delight Ventures, dives into Japan's innovation landscape. With over 25 years of experience, he reflects on how American enterprise innovation outpaces startups and why Japan lost its mobile internet lead. Watanabe discusses the challenges of retaining talent and emphasizes the need for Japanese founders to embrace global opportunities. He also highlights the importance of collaboration between startups and enterprises in Japan's evolving tech ecosystem.