Summary of Research Findings

Between December 2021 and January 2022, a corporate questionnaire was mailed to healthcare startups in Japan, which inquired their current business conditions including focal business area, funding status, and future perspectives. 61 firms responded. Viewing the respondents by attribute, 8 out of 10 startups were either a “university startup”, established typically by lab (professor) of a university or Technology Licensing Organization (TLO), or an “independent startup”, a spin-out entity created by an individual that has a background in a research institution or a healthcare company. Other companies were “offshoot startups” (business initiatives that stem from bigger parent companies), “public startups” (established chiefly by public institution), or “others”, in descending order.

Noteworthy Topics

A Majority of Healthcare Business Ventures Aim IPO Within 5 Years as Exit Strategy

To the question asking about their exit strategy within 5 years, majority of healthcare startups chose “getting listed on stock exchange market”. The result revealed that a large number of companies are considering IPO as the exit strategy in a medium- to long-term perspective.

Generally speaking, IPO gives an advantage to a company because it (1) improves company’s social credibility, (2) gives a company with an opportunity to raise additional funds, (3) increases public recognition of the company, and 4) helps in securing human resources. The second reason, increasing opportunities to raise additional funds, is particularly important for startups.

Meanwhile, the survey also showed that the startups may be too obsessed with IPO. It is imperative for healthcare startups to plan their exit strategy more flexibly, in other words, considering not just IPO but also other options, such as M&A and licensing, which may be a better choice to grow their business in the future.

Research Outline