Japan, one of the largest and most competitive economies in the world, is known for its advanced technology and diverse industrial sectors, including automotive, electronics, and robotics.
A huge contributor to its global reputation for innovation is the presence of its highly educated, industrious workforce. Similarly, there is a wealth of support from the country’s leaders and government institutions available for the public to leverage. This has led to the installation of conglomerates across different industries that sprouted over the last few decades and have expanded and secured their market globally.
However, in today’s evolving tech landscape, established enterprises no longer monopolise innovation and creativity. Young talent with entrepreneurial flair is easily found and honed through online and offline resources — particularly in the tech startup landscape.
Southeast Asia has cemented itself as an active hotbed for investment and innovation
Over the years, Southeast Asia’s tech startup ecosystem thrived due to a young, tech-savvy population, increasing internet penetration, and a growing middle class. These factors create a fertile ground for innovation in sectors like deep tech, healthtech, fintech, e-commerce, and many others.
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Regional governments have caught on to this trend, prioritising development and aiding startups with global resources for growth and expansion. According to an article published by Tatler, “The region’s growth potential is staggering, with a projected increase of $130 billion from 2022 to 2025 and an impressive CAGR of 20%. It is predicted that Southeast Asia’s technology startups could reach an astounding valuation of $1 trillion by 2025, up from $340 billion in 2020.” This attracts the attention of more developed countries looking to deploy capital.
This is why Mitsubishi Electric, one of the world’s biggest manufacturers, is pumping $35m into startups from Southeast Asia via the ME Innovation Fund (MEIF), serving as a bridge between the Mitsubishi Electric Group and startups. Since its founding in 2022, MEIF has taken “technology” as its keyword to discover innovative and novel ideas from startups and bring change to the world through co-creation.
Kenji Minefuji, Manager at Business Innovation Group at Mitsubishi Electric and Investment lead at ME Innovation Fund (MEIF), is in charge of the deal operation and project management after investment, providing hands-on support for startups.
When asked about their interest in Southeast Asia, he underlines, “The potential market and the growth of the population is the highlight. [The] Southeast Asian startup landscape demonstrated an exceptional understanding of the social issues at hand. They not only offer technological innovation and high-quality products but also provide solutions directly as well as address the needs of the communities they serve.”
One notable startup in its portfolio is Kegmil, a Singapore-based tech startup specialising in developing AI-based software solutions aimed at revolutionising the future of field service management. Kegmil is on a mission to empower deskless field service professionals in Southeast Asia through their cloud-based, mobile-first software for maintenance heroes across industries.
According to Minefuji, “We are committed to nurturing and understanding alongside Kegmil and our other portfolio companies in this journey towards excellence. Our intent is clear. In the future, we intend to proceed with scale implementation.” This is the kind of synergy that is available for regional startups to capitalise on.
Exciting synergy between Japan & Southeast Asia forging powerful future startups
Global Japanese firms have established multiple bases in Southeast Asia. Their presence provides a strong customer base for startups, aiding product launches and future expansion to the Japanese and global markets. Japanese companies offer manufacturing expertise and ecosystem access, allowing Southeast Asian startups to merge technology and market entry effectively.
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A partnership between both regions is an effective way to inject fresh deal flow into the Japanese ecosystem. This also strengthens Southeast Asia’s global reputation for innovation, as corporate support fuels expansion and speedy growth. For example, Mitsubishi Electric can be a manufacturing partner for deep tech and industrial startups well into their Proof of Concept stage.
Deep tech startups gain global support through corporate collaboration programs
Corporate and startup enablers are joining forces to support startups, leading to programs that further strengthen and empower startups. Leave a Nest started the Tech Planter, one of the largest ecosystems connecting Southeast Asia to Japan back in 2014, with the intent to discover and sprout the seeds of innovation that are being developed by researchers and startups that aim to implement their science and technology into our society. Subsequently, in 2018, they established the Center of Garage, which is a unique incubation space specialised for deep-tech startups in Tokyo, Japan.
Recently, Leave a Nest is excited to announce the establishment of the newly formed Center of Garage Malaysia. The emergence of COVID established the necessity for the emergence of deep tech startups to solve pressing concerns. There is still a lot of support needed to claim the success of startups in deep tech and the Center of Garage Malaysia aims to fulfil that role.
Based on his leadership skills directing the Leave a Nest Group as Founder and Group CEO, Yukihiro Maru, PhD, anticipates that “Deep tech startups would be a very important portion of Southeast Asia.” Dr Maru further clarifies that “The situation and current ecosystem is heavily supporting IT, but to ensure the success of deep tech startups, new measures to create a new ecosystem should be implemented.
As part of their mutual mandate, Mitsubishi Electric and Leave a Nest have been partnering since before the establishment of MEIF. For instance, through Leave a Nest’s Tech Push Program, Mitsubishi Electric shared its patented technology and also participated in collaborative opportunities with students to generate new business ideas based on scientific and technological breakthroughs.
This has become a focus area being considered for deal flow, Minefuji anticipated. Dr Maru also emphasises Leave a Nest’s promise of support for student enterprises emerging from university spin-offs and technology transfers. “My history and experience on the technical side stretch turning university technology to society adaption, and on the business side, how to IPO and collaborate with big corporates. This is the right timing for the Southeast Asian governments wanting to change the situation. Markets now rely not only on IT but also on deep tech to solve the deep issues,” he explained.
How startups can maximise the opportunities
Startups engaging with Mitsubishi Electric should know that their global presence spans beyond Japan and Southeast Asia, reaching North America and Europe. Minefuji advised that ME’s expertise holds significant market dominance in areas like factory automation and air conditioning. This extensive international network provides valuable resources for international expansion. Expanding from this, the ME Innovation Fund encourages startups to direct their energy toward tackling pressing social problems and driving transformation through innovative concepts and groundbreaking technology.
Minefuji added, “It’s vital to establish clear lines of communication regarding capabilities and limitations. The wealth of experience within our engineering community remains there as an immediate asset. This honest dialogue allows both parties to identify areas of mutual benefit.”
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Dr Maru clarifies that the verticals they are looking to support and get involved with are relevant to their existing expertise. Startups not only in industrial and logistics, AI, robotics, manufacturing, and energy, but also in biotech, biofuel, bio fertiliser, food security, agriculture and food systems, agricultural feeds, and sustainability are welcome to introduce themselves for investment and partnership opportunities.
Dr Maru explains, “Our vision is Advancing Science and Technology for Global Happiness. That is the vision for us. Not only for revenue or profit but also, we want to solve deep issues and explore deep tech. We have to actively pair with local talents to identify opportunities and co-create new business together.”
The collaboration between established Japanese conglomerates and emerging startups from Southeast Asia not only signals global interest in the region but also demonstrates the transformative potential of transnational relationships. As Southeast Asia cements its position as a thriving hub for investment and innovation, the ME Innovation Fund’s commitment to this collective success reflects a strategic effort to capitalise on the region’s remarkable potential — with Japan ultimately serving as a catalyst to unlocking growth opportunities for the region and beyond.
For more information, visit https://www.mitsubishielectric.com/cvc/index.html
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This article is produced by the e27 team, sponsored by CPXI
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