No.2921
03/09/2022

Healthcare Startups in Japan: Key Research Findings 2021

Corporate Questionnaire Reveals More than Half of Healthcare Startups in Japan Aim IPO as Exit Strategy within 5 Years

Yano Research Institute (the President, Takashi Mizukoshi) has conducted a corporate questionnaire and in-person interviews on the market trends of healthcare startups in Japan and found out the current status and future perspectives.


Summary of Research Findings

The survey was conducted between December 2021 and January 2022 based on the corporate questionnaire mailed to healthcare startups in Japan, which inquired their current business conditions including focal business area, funding data, and future perspectives. 61 firms responded. Viewing by type of startup, 8 out of 10 startups were either a “university startup”, a venture created on the basis of intellectual property developed by a university lab (by a professor) that is licensed through Technology Licensing Organization (TLO), or a “complete startup”, a new entity created by an entrepreneur that previously worked for a research institution or a healthcare-related company. Rest of the respondents were “spinoff” (a split of a large enterprise), “public institutional startup” (established chiefly by public institution), or “others”, in descending order.

Noteworthy Topics

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

To the question asking what they are aiming as the exit strategy in 5 years, more than half of healthcare startups chose “getting listed on stock exchange market”. The result revealed that a large number of companies are considering to go public through IPO as the exit strategy in a medium- to long-term perspective.

Generally speaking, IPO gives an advantage to the company because it (1) improves the company’s social credibility, (2) gives a company with an opportunity to raise additional funds, (3) increases public awareness of the company, and 4) helps in retaining/hiring talent. Out of these, the second reason, getting better access to raising money, is particularly important for startups.

Meanwhile, from the perspective of the investment environment of venture companies, the survey result shows that there is a strong bias among venture founders regarding the way of collecting the return for investments. It is imperative for healthcare startups to plan the exit strategy more thoroughly, considering not just IPO but also other options like M&A and licensing, which may be a better choice to grow their business in the future.

Research Outline

1.Research Period: November 2021 to January 2022
2.Research Object: Healthcare startups
3.Research Methogology: Face-to-face interviews by the expert researchers (including online interviews), mailed questionnaire, and literature survey

Healthcare Startups

In this survey, healthcare startup refers to a venture company that do business mainly in or for healthcare industry. Such startups include bio-venture firms, medical device ventures, and other startups that offer: 1) product that is not subject to regulation under PMD Act (Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices), 2) healthtech solution such as telemedicine solution, and 3) tools and services to streamline business process management of medical institutions.

<Products and Services in the Market>

Products and services that relate to medical care/healthcare, solutions for medical institutions, etc.

Published Report

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