Ask most investors where Japan’s startup action is, and they will say Tokyo without hesitation. But at this year’s IVS 2026, one of Japan’s largest startup gatherings, a quieter story was playing out an hour’s train ride south-west: Kyoto, a city better known for temples than transistors, has quietly built one of Asia’s more interesting deeptech ecosystems.
The numbers, at least on paper, are not huge. According to Kyoto City, the ecosystem now counts more than 650 startups, over 250 of them university spin-offs, backed by more than 20 venture capital and corporate venture capital firms. Compared to Tokyo’s startup density, that is a modest showing. But scale was never really the pitch. The pitch is patience and whether patience, finally connected to global capital, can be a competitive advantage rather than a liability.
A different game from Tokyo
Tokyo and Kyoto are not competing head-on, and the split is fairly clean. Tokyo dominates in SaaS, fintech, consumer marketplaces and fast-moving AI applications, the categories where speed and scale decide winners.
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Kyoto’s strength, on the other hand, sits in semiconductors, robotics, materials science, life sciences and climate and energy technology: fields where breakthroughs take years, sometimes decades, and where a rushed timeline is often a red flag rather than a virtue.
That distinction matters because Kyoto is not trying to out-run Tokyo. Its compact geography, with most of its universities, research institutes, corporations and manufacturers sitting within walking or cycling distance of each other, makes the kind of slow-burn collaboration deeptech requires easier to sustain. Ideas can move from lab bench to funding to manufacturing without leaving the region, something few cities can claim at this scale.
The case, according to the money
Don Stalter, Managing Partner at Sunshine Lake, has watched Japan since 2011, when he worked on Groupon and Airbnb’s international expansion before becoming an early backer of Deel and Canva. His read on Kyoto is unambiguous: the city has “something money can’t buy and speed can’t replicate”, a manufacturing lineage running through Nintendo, Kyocera, Murata, Omron, Shimadzu and Horiba — companies that he says chose depth over fashion and stayed independent long enough to become irreplaceable links in global supply chains.
He points to three concrete strengths. Kyoto University’s research density, which has produced a notable share of Japan’s Nobel laureates, including the iPS cell breakthroughs behind regenerative medicine. A steady renewal of talent, with roughly one in ten Kyoto residents a student. And a cultural tolerance for long timelines that, in his view, cannot simply be bought with venture capital.
But Stalter is careful not to romanticise the gap. What Kyoto lacks, he argues, is not science or talent but bridges: early-stage global capital, global customers from day one, and networks willing to treat a Kyoto founder the same way they would treat one in San Francisco. He also flags the recycling problem common to younger ecosystems, a handful of big exits whose founders and early employees reinvest back into the next generation is still largely missing in Kyoto’s case.
The founder’s view
Hide Morita, CEO of fan-engagement platform Queri and grandson of Sony co-founder Akio Morita, offers a more grounded, on-the-ground version of the same argument. Tokyo, he says plainly, has easier access to capital, customers and large corporations. What Kansai offers instead is depth — engineering and manufacturing knowledge concentrated in one place, built by companies such as Kyocera, Murata and Nintendo that became world-class by narrowing rather than diversifying.
Morita’s own company is a useful proof point of the region’s slower logic. Queri connects Japanese and Asian entertainment companies with fans overseas, where roughly 40 per cent of its users are already based outside Japan. Building the infrastructure to serve that demand, he says, is “slow, unglamorous work”, not unlike the deeptech ventures Kyoto is known for, which depend on universities, engineers, manufacturers and investors staying aligned over years rather than product cycles.
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Like Stalter, Morita is sceptical that capital alone solves the harder problem. Kyoto’s more than 650 startups are not short of technology, he argues; they are short of the operating experience (sales, hiring, international expansion) needed to take a lab breakthrough global. His prescription is specific: don’t try to turn Kyoto into another Tokyo or Silicon Valley. Keep the long-term mindset and technical depth, and pair it with far better access to the rest of the world.
What’s actually being built
The specifics back up the pitch. TreGem Biopharma, a Kyoto University spin-off, is developing what it describes as the world’s first tooth-regrowth drug, an antibody therapy targeting a protein called USAG-1, with an initial focus on patients born without a full set of teeth. DeepForest Technologies uses AI to analyse drone footage and identify individual tree species and carbon absorption at single-tree resolution — a granularity increasingly demanded by carbon credit buyers and by Japan’s ageing, postwar-planted forests.
Kyoto Fusioneering has taken a “picks and shovels” approach to fusion energy, building the exhaust and fuel-cycle systems fusion plants will need rather than reactors themselves, and has reportedly become a supplier to several private fusion developers internationally. EneCoat Technologies, meanwhile, is developing perovskite solar cells that generate electricity even under cloudy skies or indoor lighting, thin and flexible enough to apply to windows rather than rooftops.
None of these are Tokyo-style growth stories. They are long-horizon bets that only make sense if the surrounding ecosystem — universities, manufacturers, patient capital — stays intact long enough to see them through.
The bet, stated plainly
Kyoto’s proposition to international founders and investors is narrow but specific: a compact city where research institutions, manufacturers, government and capital sit close enough together to move fast on slow science, a manufacturing culture with genuine present-day depth in precision engineering, and a globally recognisable brand that needs no introduction.
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Whether that is enough remains an open question. Deeptech ecosystems live or die on decades, not news cycles, and Kyoto’s recycling of capital and talent is still early. But the underlying argument — that a thousand years of patience, finally wired into global capital, might outlast speed — is at least a coherent one. Tokyo built Japan’s startup scene on speed. Kyoto is testing whether the opposite instinct can work just as well.
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This article was originally published by Blockbox, a media outlet that reports on the Japanese startup scene.
The post Why Kyoto, not Tokyo, is Japan’s real deeptech bet appeared first on e27.