New start-up wave challenges Japan's aversion to risk

A wave of start-ups is emerging in famously risk-averse Japan as cash-rich corporations increasingly delegate the task of keeping pace with technologies such as artificial intelligence and robotics to smaller, nimbler businesses. Japan has been dry ground for start-ups, given the shame that entrepreneurs and investors associate with failure, but it is on track for a record funding year for unlisted start-ups, exceeding the dot-com bubble of 2000, according to a private research firm. "The fundraising environment has improved a lot compared with a few years ago," said Ken Tamagawa, 40-year-old CEO of Soracom Inc, which helps companies set up platforms allowing devices to communicate with each other via the "Internet of Things". It raised 3 billion yen ($25.6 million) from Mitsui & Co and an investment fund in which Toyota Motor Corp has a stake. Dozens of companies, including electronics maker Omron Corp and real estate developer Mitsui Fudosan Co, have set up venture capital funds to seek returns or team up with smaller companies.