Huge swathes of cash are flowing from Japan to European tech startups as risk-averse investors favor a more mature entrepreneurial ecosystem, helping to scale the continent’s booming deep tech cluster.
While the European startup and venture capital ecosystem has long operated in the shadow of Silicon Valley, it has become fertile ground for Japanese corporates, whose domestic market is younger.
Japanese investors or venture capital funds who themselves have Japanese investors, known as limited partners, participated in European financing rounds worth more than 33 billion euros ($38 billion) since 2019 when a trade deal between the European Union and Japan came into force, according to research from venture capital fund NordicNinja and data platform Dealroom.
For the five years leading up to the EU-Japan Economic Partnership Agreement, investment totaled 5.3 billion euros.
In Europe at that time, “there was no Japanese capital other than Softbank,” Tomosaku Sohara, co-founder and managing Partner of Japan-Europe VC NordicNinja, told CNBC. NordicNinja, which has 250 million euros of assets under management, is a joint venture between Japan’s JBIC IG Partners and private equity firm BaltCap.
“Softbank was pretty active already at that moment, because they had acquired Finnish gaming company Supercell,” Sohara said, noting that the acquisition injected life into Finland’s startup ecosystem.
Now, Mitsubishi, Sanden, Yamato Holdings, and Marunouchi Innovation Partners are among those directly backing European tech, per the report, while Japan-linked venture capital firms such as NordicNinja, Byfounders, and Toyota‘s Woven Capital cut checks to startups on the continent.
There are over two times more VC-backed startups in Europe than in Japan, per capita, and 4.3 times more unicorns, per the report.
The shadow of Silicon Valley
Japan’s appetite for investing was always there, Sohara said. Its multinationals — like many — headed stateside to set up corporate venture capital arms in early 2000, in search of a slice of the action at the time when some of today’s largest companies were just being thought up in dorm rooms.
“Nobody wanted to look at Europe at that moment, but I think that after a couple of years they realized, ‘Hey, maybe the U.S. culture is totally different from the Japanese culture,’ and they began thinking, ‘Hey, maybe we need to look at another region like Europe,'” Sohara said, adding that the profile of entrepreneurs in Europe, many of whom came from large corporates at the time, was more aligned with Japan. That’s in contrast to the young founders coming from Stanford or university research and development departments, he said.
“They have experience at the corporates and also they have a mindset of entrepreneurship. Japan, unfortunately, is lacking the entrepreneurship mindset,” Sohara added, referring to Europe’s founders, many of whom came from Nokia and Skype.
The pull for founders
Japanese-linked investors have a penchant for one sector in particular: deep tech, which refers to companies building on top of scientific or engineering innovation. Deep tech and artificial intelligence accounted for 70% of deals made by such investors in Europe in 2024, echoing trends in the broader startup ecosystem as the AI, energy, and defense industries boom.
The top-funded companies with Japanese participation include the U.K.’s autonomous vehicle startup Wayve, which raised $1.05 billion in an investment round in May 2024, British quantum computing firm Quantinuum, which secured 273 million euros in January 2024, and Spanish quantum firm Multiverse Computing, which saw investors cut it a check of 189 million euros in June 2025. The rounds were backed by Softbank, Mitsui and Toshiba, respectively.
Such companies, however, typically need a lot of growth capital and industrial experience to scale successfully — two elements that Europe famously lacks.
“Investment appetite is way stronger than [in] any strategics I’ve seen here in Germany or in Europe,”
Sarah Fleischer
co-founder and CEO, Tozero
“Japanese firms — and they’re old, most of them that we’re talking about, right — they’re just sitting on a pile of money. They’ve been saving money throughout the last century, and now they’re starting to spend it, to try to grow as a large corporate and increase their footprint outside of Japan,” said Sarah Fleischer, co-founder and CEO of Germany-based battery materials recycling startup Tozero.
“You see that investment appetite is way stronger than [in] any strategics I’ve seen here in Germany or in Europe,” she added. Tozero has raised 14.5 million euros to date and counts NordicNinja, Honda and JJC among its investors.
It’s not just about the check. Japanese corporates and industrials have robust manufacturing and automotive know-how, Fleischer and Sohara noted respectively, meaning they are well positioned to plug Europe’s knowledge gaps when it comes to scaling large manufacturing projects.
Fleischer added that Japanese firms have long shored up their critical minerals supply chain and long-established trading firms, meaning they know how to secure essential components needed for the energy transition. For Tozero, this is an added plus, Fleischer said, given it’s in the business of recovering such materials from spent batteries.
In the age of political uncertainty amid choppy U.S.-China relations, Japan also acts as a good bridge to the Asian markets, Fleischer said.
A slower pace and lower risk appetite
Back in Japan, the number of entrepreneurs is “still very limited,” Sohara said, as the older generation and “great talents” wanted to work for “a Toyota and Honda or Sony,” he added, but the younger generation’s mindset is beginning to change.
Europe has also become the home to ambitious would-be founders searching for a tech ecosystem to build their companies in, Sohara said.
However, as collaboration between Europe and Japan scales, language remains a barrier as fluency in English is not widespread in Japan, he added.
For Fleischer, this also poses challenges. “There’s so much miscommunication and local translation that could ruin a partnership instantly. And there’s also some sort of cultural aspect as well, one needs to probably be aware of,” she said, adding that she recently spent weeks in Japan getting to know her investors face-to-face, “because that’s still the sentiment” there.
Decision-making can therefore be slower, the founder said, due to thorough research and preparation. “They just do their homework,” Fleischer said, noting that Japanese partners were hands-on in helping the company understand “how to build our next future commercial plant, potentially starting from Japan and then going worldwide.”
Indeed, “without the support from NN [NordicNinja] it would have been much more difficult to build the right relationships,” said Aaike van Vugt, co-founder and CEO of Dutch nanotechnology engineering firm VSParticle.
That’s in contrast to perhaps the most well-known Japanese player: Softbank. Softbank is “totally different” from traditional Japanese investor cultures, given it is driven by founder Masayoshi Son’s decisions rather than operating on a consensus basis, like most Japanese business, Sohara added.
The venture firm, known for its lofty bets on WeWork and, more recently, chip company Arm, poured huge sums of cash into tech startups amid the 2021 venture capital tech boom, which saw at least one Japanese-linked investor involved in deals worth 11.2 billion euros, per the report. Softbank stood out during this period; it was involved in 22% of deals with Japanese-linked participation in 2021.
Interest ticking up
Looking forward, Sohara and Fleischer expect greater collaboration between Europe and Japan. However, Japanese investors are expected to participate in rounds worth 3 billion euros in 2025, per the Dealroom and NordicNinja report, representing a dip from last year.
As many eyes turn to the Middle East for investment, Fleischer said that interest in Japan appears to be ticking up. Anecdotally, “people reach out to me for intros, which is fun, to meet Japanese corporate LPs,” she said, noting that this is a new development for her but that it may simply be because she has such investors now.
“I think it’s also politically driven as well in Japan, by the government, to position themselves more geopolitically smartly and make sure that the corporates or the industries grow in certain ecosystems, strengthening their positioning as a country,” she said.
Tesla is launching a new car rental program out of its stores in the US, as sales are crashing due to the end of the federal tax credit.
It’s available at select stores in the US right now.
Tesla’s demand in the US, like that of most other electric vehicles, has crashed after the federal tax credit for electric cars ended last quarter, pulling forward a lot of demand.
With inventories piling up at stores and dealers across the country, Tesla has found a new way to use its inventory: it is now renting (not leasing) its vehicles from its stores.
The rental duration is a minimum of three and a maximum of seven days, starting at $60 per day and increasing depending on the model.
Tesla appears to be using this to show potential buyers how convenient it is to own a Tesla vehicle, since it also includes Supercharging and Full Self-Driving (Supervised) for free with every rental.
If a rental customer decides to order a vehicle within a week of having rented one, Tesla gives them a $250 credit toward the purchase:
Order your own Tesla within seven days of your rental to get up to a $250 credit toward your purchase.
The program is starting with a couple of locations in Southern California, but it is expected to expand before the end of the year.
Car rental giant Hertz has previously bought a large fleet of Tesla vehicles in an effort to electrify its rental fleet.
However, Hertz has been divesting from Tesla vehicles and selling them over the last 2 years, as declining resale values crushed its fleet economics amid Tesla slashing prices due to declining demand over the last 3 years.
Electrek’s Take
It’s rough out there for people selling electric vehicles in the US right now. The lack of policy consistency is resulting in inconsistent demand and discouraging automakers from pushing electric cars, as they do in Europe and Asia.
It’s particularly challenging for automakers like Tesla, Rivian, and Lucid, which sell only electric vehicles, because most people who planned to buy an electric vehicle in 2025 have already bought one in Q3 or earlier.
This rental service is not a bad idea, though, but it’s obviously far from a solution to the demand problem in the US.
It’s wild to think that Tesla’s own CEO is largely responsible for creating this situation by backing Trump in the last elections.
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Acting Chair of the US Commodity Futures Trading Commission (CFTC) Caroline Pham is in talks with regulated US crypto exchanges to launch leveraged spot crypto products as early as next month.
In a Sunday X post, Pham confirmed that she is pushing to allow leveraged spot crypto trading in the US and that she is in talks with regulated US crypto exchanges to launch leveraged crypto spot products next month.
Pham also confirmed that she continued meeting with industry representatives despite the government shutdown. The regulator is also currently considering issuing guidance for leveraged spot crypto products.
The news comes after the CFTC launched an initiative in early August to enable the trading of “spot crypto asset contracts” on exchanges registered with the regulator. In an announcement at the time, Pham invited comment on the rules that governed “retail trading of commodities with leverage, margin, or financing.”
According to the Federal Register, the Commodity Exchange Act “provides that a retail commodity transaction entered into with a retail person which is executed on a leveraged or margined basis” is “subject to the Commission’s jurisdiction, unless the transaction results in actual delivery of the commodity within 28 days of the transaction.” Consequently, leveraged crypto spot positions would only be allowed if their duration were limited to 28 days or they would be illegal.
Related: Republican Senator Says There’s a Small Time Frame for Passing Crypto Bill
Crypto pushes forward despite shutdown
A US government shutdown occurs when Congress fails to pass an annual spending bill or a short-term continuing resolution, blocking much of the federal government’s spending. In such situations, non-essential services are paused, some workers are furloughed, and others work without pay.
The current shutdown started on Oct. 1. However, Sunday reports suggest that the shutdown is likely nearing its end as the Senate moves to consider a continuing resolution to fund the government.
Related: Michael Selig Confirms CFTC Nomination, but Questions Linger
The report follows speculation about the impact of the government shutdown on progress in US crypto regulation. Early October reports noted that the SEC began its shutdown by announcing that it would “not engage in ongoing litigation,” except for emergency cases.
Despite this, at the end of October, many US senators reportedly moved to advance a bill on crypto market structure rules, despite the shutdown. Reports from earlier this month also suggest that meetings on the bill are still taking place in the US Senate despite the shutdown.
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