Japanese investors turn to Europe as deep tech boom lures capital abroad
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.
Waymo co-CEOs (L-R): Tekedra Mawakana and Dmitri Dolgov
Waymo
Self-driving car company Waymo is in talks to raise $15 billion in funding in the new year.
The robotaxi company plans to raise billions from Alphabet, its parent company, as well as outside investors at a valuation as high as $110 billion, according to a person familiar with the discussions.
The latest funding discussions are indicative of Waymo’s status as the leader of the pack in the U.S. robotaxi market. The company has been spending heavily to ramp up its fleet and continue expanding to more regions. Waymo is now either operating its robotaxis, planning to launch service or starting to test its vehicles in 26 markets, in the U.S. and abroad.
Alphabet CEO Sundar Pichai said Waymo will “meaningfully” contribute to Alphabet’s financials as soon as 2027, CNBC reported Tuesday.
If the Google sister company winds up raising as much as $15 billion, that would represent more than double the amount of its last funding round. That was a series C round of $5.6 billion at a $45 billion valuation, which closed in October 2024. Alphabet had committed $5 billion in a multiyear investment to Waymo at the time.
That round was led by Alphabet alongside previous backers, including Andreessen Horowitz, Fidelity, Perry Creek, Silver Lake, Tiger Global and T. Rowe Price. At the time, Waymo co-CEOs Tekedra Mawakana and Dmitri Dolgov said the funding would go toward expanding its robotaxi service.
Waymo currently serves paid rides to the public in the Austin, San Francisco Bay Area, Phoenix, Atlanta and Los Angeles markets.
Earlier this month, CNBC reported that Waymo crossed an estimated 450,000 weekly paid rides, and the company in December said it had served 14 million trips in 2025, putting it on pace to end the year at more than 20 million trips total since launching in 2020.
The company plans to open service next year in Dallas, Denver, Detroit, Houston, Las Vegas, Miami, Nashville, Orlando, San Antonio, San Diego and Washington, D.C. Waymo also announced plans to launch its service in London in 2026, which will mark the company’s first overseas service region.
Amazon’s Zoox this year began offering free driverless rides to the public around the Las Vegas Strip and certain San Francisco neighborhoods. Tesla launched a Robotaxi-branded service in Austin and the San Francisco Bay Area, but those cars still had human drivers or safety supervisors on board as of mid-December.
Fundraising plans were first reported by The Information.
WATCH: 2025: The year that the robotaxi went mainstream with Waymo leading the pack
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