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Japanese Tech Investment Report

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In 2016, Japanese corporations invested $3.1B across 125 deals to VC backed companies. Will these corporates win the next tech revolution and avoid disruption?

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Japanese Tech Investment Report

  1. 1. www.cbinsights.com 2 IN THE LAST 15 YEARS, 52% OF FORTUNE 500 COMPANIES HAVE DISAPPEARED 1955 61 year lifespan in S&P 500 2015 17 year lifespan in S&P 500 vs
  2. 2. www.cbinsights.com 3 “I just think it is serving a different kind of need. It’s a different business segment onto itself. And the segments that we are serving largely, I think, will remain separate and distinct from that. I don’t think customers suddenly woke up…and aid, ‘We really don’t care about consistently high quality products, and we don’t need service and we don’t need amenities.’ I just don’t buy it.” – Chris Nassetta, CEO of Hilton on Airbnb TECHNOLOGY IS EATING EVERY INDUSTRY
  3. 3. 4 TECHNOLOGY EVOLUTION IS QUICK Phase 1 Mainframe Phase 2 Mini computer Phase 3 PC Software Phase 4 Internet Web Phase 5 Mobile Apps Phase 6 Connected Platforms Hardware & Software
  4. 4. 5 JAPAN IS WELL-POSITIONED FOR THE NEXT PHASE, IF…
  5. 5. www.cbinsights.com 6 PINPOING EMERGING INDUSTRIES & TRENDS IDENTIFY POTENTIAL STARTUP DISRUPTERS SEE EXISTING AND NEW COMPETITOR MOVES NEW BUSINESS MODELS AND TECHNOLOGIES IF THEY CAN RESPOND TO NEW TRENDS AND THREATS QUICKLY
  6. 6. Anand Sanwal CEO / Co-founder, CB Insights Ran American Express $50M Chairman’sInnovation Fund Prior work in venture capital and M&A Author of “Optimizing Corporate Portfolio Management” (Wiley 2007) Graduate of Wharton (Finance/Accounting) and University of Pennsylvania (Chemical Engineering) @asanwal ABOUT ME asanwal@cbinsights.com
  7. 7. Technology market intelligence for data-driven executives. CB Insights software lets you predict, discuss and communicate emerging technology trends using data in ways that are beyond human cognition. www.cbinsights.com 8
  8. 8. FINDING SIGNAL www.cbinsights.com 9 Without data, you’re just another person with an opinion. OLD SCHOOL (limited by human cognition) Google searches Gut instinct Guyswith MBAs (pundits aka consultants, analysts) NEW SCHOOL (beyond human cognition) Machine learning Naturallanguageprocessing Topic modeling Probability driven models Signals discerned from millions of sources including: • Venturecapital / angel investments • Startup data • Patents • Government grants • News media • Social media
  9. 9. See what other customers have to say at http://www.cbinsights.com/customer-love “We use CB Insights to find emerging trends and interesting companies that might signal a shift in technology or require us to reallocate resources.” TRUSTED BY WORLD’S LEADING COMPANIES Beti Cung Corporate Strategy, Microsoft
  10. 10. www.cbinsights.com 11 62 9 16 211 490 1200 1400 2010 2011 2012 2013 2014 2015 2016 (YTD) From the NY Times to Bloomberg, CB Insights data is used by hundreds of leading media outlets every week “ACCORDING TO CB INSIGHTS…” CB INSIGHTS MEDIA CITATIONS PER YEAR
  11. 11. In 2016, Japan’s corporations invested: $3.1 BILLION across 125 DEALS, to VC backed companies. www.cbinsights.com 12www.cbinsights.com
  12. 12. MORE THAN 60% OF DEALS INVOLVE CORPORATES www.cbinsights.com 13www.cbinsights.com 62% 61% 66% 68% 68% 38% 39% 34% 32% 32% 2012 2013 2014 2015 H1 2016 DEALS TO VC-BACKED COMPANIES WITH VS WITHOUT CORPORATE PARTICIPATION IN JAPAN 2012 - H1 2016 Deals to VC-backed Companies with Corporate Participation Deals w/o Corporate Participation
  13. 13. JAPANESE CORPORATIONS ARE PRETTY ACTIVE www.cbinsights.com 14www.cbinsights.com $852 $1,005 $3,368 $5,875 $3,124 84 117 189 169 125 2012 2013 2014 2015 2016 YTD (9/27/16) JAPANESE CORPORATE DEALS AND DOLLARS TO VC BACKED COMPANIES GLOBALLY 2012 - 2016 YTD (9/27/16) Disclosed Funding ($M) Deals $4,028 (Full-Year Projection) 168 (Full-Year Projection) LESS ACTIVE THAN US OR CHINESE PEERS, HOWEVER
  14. 14. MITSUI & CO. IS THE MOST ACTIVE JAPANESE CORPORATE INVESTOR www.cbinsights.com 15 MOST ACTIVE JAPANESE CORPORATES BY DEAL COUNT 2012-2016 YTD (9/26/2016) RANK INVESTOR 1 2 3 4 5 RANK INVESTOR 6 7 8 9 10 RANK INVESTOR 11 12 13 14 14
  15. 15. MOST ACTIVE CORPORATE INVESTORS IN JAPAN RANKED BY DEAL COUNT 2012 – 2016 YTD (9/27/2016) www.cbinsights.com 16 Rank Investor Select  Investments  Made  Between  2015  -­2016  YTD  (9/27/2016) 1 2 3 4 5
  16. 16. BUSINESS SOCIAL GRAPH OF JAPANESE CORPORATE INVESTMENTS IN THE LAST 12 MONTHS www.cbinsights.com 17
  17. 17. ACTIVITY PICKING UP IN SPECULATIVE AREAS LIKE QUANTUM COMPUTING www.cbinsights.com 18 Corporation Engagement Quantum Computing Activity R&D/ Product Development MitsubishiElectric is developing proprietary quantum cryptography equipment to secure mobile communications. R&D/ Partnership NEC and Fujitsu partner to offer customers quantum-encrypted communications over long distances. R&D/ Product Development Nippon Telegraph and Telephone Corporation is developing quantum- based computer chips that rely on photons– particles of light -- to process information. R&D/ Product Development Toshiba’s prototype quantumkey distribution system delivers digitalkeys for cryptographicapplications on fiber-optic-based computer networks. Toshiba maintains one of the largest quantum IPportfolios in the world.
  18. 18. www.cbinsights.com 19 Source: Clay ChristensenDisruptive Innovation Framework TODAY’S EXPERIMENTS BECOME TOMORROW’S PROBLEMS.
  19. 19. www.cbinsights.com 20 Source: Clay ChristensenDisruptive Innovation Framework DISRUPTIVE INNOVATION COMES FAST & FURIOUS
  20. 20. #FutureFintech www.cbinsights.com 21 STARTUPS EQUAL OUTSOURCED R&D IN THE LAST 5 YEARS, MORE THAN 38,135 EARLY-STAGE FINANCINGS TOTHESE EXPERIMENTS
  21. 21. www.cbinsights.com 22 Source: Clay ChristensenDisruptive Innovation Framework DISCOUNT THEM TODAY. AT YOUR PERIL.
  22. 22. THESE EXPERIMENTS ARE MULTIPLYING www.cbinsights.com 23 Cost  to  Launch  a  Tech  Startup Source: Upfront Ventures
  23. 23. Get the complete 59-page report Get access to the full report to understand how Japanese corporations can win the next tech revolution and avoid disruption. Get the PDF If you're on mobile, use this URL: cbi.vc/japan-tech

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