In 2024, startup buyouts in Japan surged to a record high as looming Tokyo Stock Exchange (TSE) rule changes and growing regulatory pressure prompted founders to pursue mergers and acquisitions (M&A) over initial public offerings (IPOs).
According to For Startups, a leading market research firm, Japan saw 199 startup acquisitions in 2024, more than double the total in 2020. In contrast, IPO activity slowed dramatically, with just 21 public listings recorded in the first half of 2025—a reflection of the shifting entrepreneurial climate.
The regulatory shift stems from new rules targeting companies listed on the TSE Growth Market, set to take effect by 2030.
Key Highlights
199 startup acquisitions in 2024—double the 2020 figure IPOs dropped to 21 in H1 2025 amid rising regulatory scrutiny Foreign investors like Goldman Sachs & KKR fueling major deals
Firms must reach a market capitalization of at least 10 billion yen (US$66 million) within five years of listing or face delisting. Alarmingly, over 60 percent of the 600+ firms currently on the Growth Market fall short of that benchmark.
As a result, Japanese startup founders are increasingly opting for acquisitions, hoping for smoother exits and more sustainable growth. The trend is also attracting international investors, including Goldman Sachs and KKR, who have participated in several major funding rounds for Japanese startups, seeking global-scale returns.
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This pivot toward private exits and foreign capital reflects a broader shift in Japan’s innovation ecosystem, one that may redefine how the country builds its next generation of globally competitive tech companies.
AloJapan.com