SusHi Tech Tokyo 2026, one of Asia’s foremost international innovation conferences, was held at Tokyo Big Sight from April 27 to 29. Dedicated to creating sustainable cities through advanced technology, the event returned for its fourth edition—the largest to date—with 770 startups from Japan and overseas exhibiting and 60,000 attendees, including prominent entrepreneurs and investors.
Tokyo Governor Yuriko Koike took the stage at the opening session. Amid heightened geopolitical instability and more frequent natural disasters, she underscored the growing relevance of SusHi Tech Tokyo’s vision. She then introduced two programs: SusHi Tech Global, designed to accelerate startups’ international expansion, and SusHi Tech Global Funds, which provides financial backing. Taken together, these efforts suggest that Tokyo’s startup ecosystem is moving into its next phase.
During the three-day program, leaders from diverse sectors joined sessions on sustainable cities, emerging technologies, and the future of startup ecosystems. A panel on April 27 focused squarely on structural changes in capital markets: “The New Frontier of Private Markets: Rise of Pre-IPO, Secondaries, and the Evolving Role of Growth Equity.”
Moderated by Yoichi Morimoto of HiJoJo Partners, the panel featured James Chang of ExBorder Partners, Megumi Ikeda of Ode Growth Partners, and Shunsuke Uchikawa of Keyrock Capital Management, each working at the forefront of growth equity investing. It concluded with news that ExBorder Partners would open a Tokyo office, highlighting overseas investors’ rising interest in Japan’s startup sector.
Growth Equity Cannot Be Defined by Round Labels
The discussion opened with Morimoto’s question: “What is growth equity?” As businesses stay private for longer and pre-IPO and secondary deals become more common, growth equity is moving beyond its traditional role as capital supplied ahead of an IPO. The concept increasingly refers to strategic funding that equips firms with the organizational structure, scalable model, and investor-relations capabilities required for public markets.
Chang, whose firm ExBorder Partners is headquartered in New York, applies the term broadly, covering the period from Series B through IPO. Companies tend to draw serious attention once revenue approaches $50 million. Equally important, however, is whether a business is genuinely “one of one” in its market—or at least among a small group of clear leaders.
Ikeda of London-based Ode Growth Partners, which invests across Europe, made a similar point: round labels alone reveal little about a company’s maturity. Her firm considers businesses with annual revenue of roughly $10 million to $150 million.
“Product-market fit is critical. A company needs a repeatable go-to-market model in its core market and a credible path to future profitability,” Ikeda explained. “The central investment question is whether it can sustain long-term growth rather than merely ride temporary market momentum.”
Uchikawa of Keyrock Capital Management was “pleasantly surprised” by how closely Japan’s definition of growth investing aligns with those in the United States and Europe. Companies at broadly similar stages may be labeled Series A in one case and Series E in another. Despite these differences, Japanese investors assess product-market fit using factors such as company scale and revenue, with an approximate revenue benchmark of $7 million to $15 million. What matters more is the maturity of the business and the quality of its KPIs.
IPO Readiness Involves More Than Revenue
The conversation then shifted to what it takes for a company to be “IPO-ready.” For crossover investors able to retain shares after listing, an IPO is not merely an exit. For Chang, every investment—whether at Series B or pre-IPO—is made with an eventual listing in mind.
Chang framed IPO readiness as a source of flexibility: “Building a company capable of meeting the demands of an IPO broadens its strategic options and strengthens its negotiating position across every exit route, including M&A.”
This is particularly important in Japan, where funding is relatively abundant from pre-seed through Series A but capital and support become scarcer from Series B onward. Chang called the gap the “post-Series B death valley” and cast growth equity as a bridge to the next phase. Beyond financing, growth investors are expected to work alongside companies as they prepare for an IPO.
Readiness requires far more than higher revenue. Is the right CFO in place? Has the company established an audit committee, robust governance, and an investor-relations function? It must be able to present a compelling strategy to public-market investors and maintain an ongoing dialogue with them.
This emphasis on IPO readiness mirrors Uchikawa’s concern with how businesses will be judged after listing. Japanese venture capital firms often treat the IPO itself as an exit. Global institutional investors, by contrast, look for sustainable growth, a credible path to profitability, and predictable future performance. Uchikawa believes these criteria receive too little attention among Japanese VCs.
Where Does Japan Hold an Edge?
Location and surrounding market conditions are equally important when examining a growth-stage business. The panel therefore considered how the current macroeconomic environment and regional industrial landscapes influence investment priorities.
Uchikawa identified inflation-driven structural change as one of the most consequential developments in Japan. After decades of deflation, rising prices are already reshaping corporate and consumer behavior. Coupled with wider adoption of AI, this transformation is opening fresh business opportunities for startups.
From a global investor’s perspective, Chang attributed Japan’s potential to the capabilities the country has developed over decades. The United States remains the principal hub of innovation, but dynamic ecosystems have emerged in China and elsewhere. Rather than apply a uniform standard, investors should look to each region’s industrial foundations and technological edge.
Chang identified robotics, physical AI, semiconductors, and semiconductor manufacturing equipment as fields in which Japan could attain worldwide prominence. Its competitive assets include decades of manufacturing expertise, a deep pool of engineering talent, world-class universities and research institutions, and dense industrial clusters. He placed particular weight on alignment between the public and private sectors.
“In capital-intensive deep tech, it is difficult for any single company to compete internationally on its own. When the public and private sectors work closely together and concentrate on areas where a region has a genuine advantage, exceptional innovation can emerge.”
Secondary Markets Expand Liquidity
The panel then examined the role of secondary markets in broadening access to liquidity. Uchikawa explained that growth investors usually concentrate on primary investments, which inject fresh capital into a business. Recently, however, more deals have paired that funding with secondary components, enabling existing shareholders to sell part of their holdings.
Uchikawa summarized the appeal of such structures: “They channel fresh capital into the company through the primary portion and give existing shareholders partial liquidity through the secondary portion. This structure can also make the deal more attractive to new growth investors.”
In Japan, shares in private companies have traditionally been treated as assets to hold until an IPO. As businesses remain unlisted for longer, early investors and employees have fewer chances to cash out. A more active secondary market can ease this rigidity and facilitate a transition to a shareholder base better suited to the company’s current phase.
Ikeda argued that secondaries can improve capital circulation across the ecosystem. Employees who monetize part of their equity may use both the proceeds and their operating experience to become angel investors in the next generation of startups. Similarly, a partial exit for early backers from the pre-seed or seed stage can release funds for reinvestment in emerging ventures.
More than a mechanism for trading shares, secondaries can power the ecosystem’s flywheel.
ExBorder Partners to Open a Tokyo Office
In their final remarks, the panelists outlined their outlook for growth equity in Japan. Uchikawa portrayed the field as relatively small but steadily expanding, with the shortage of later-stage capital remaining a major obstacle. He pointed to reforms of the Tokyo Stock Exchange’s Growth Market 1 as encouraging startups and investors to move beyond “small, early exits” in favor of larger, more meaningful IPOs.
Uchikawa put the sector’s increasing importance plainly: “Growth investing is becoming indispensable to Japan’s startup ecosystem. I am now preparing a new fund dedicated to growth-stage Japanese startups.”
Ikeda highlighted Japanese corporations’ strong appetite for innovation and the way collaboration with large companies intensifies as startups mature. She suggested that Japan is now attracting more international interest than Europe did during the development of its own growth market.
Chang urged founders to think globally and engage with growth investors as early as seed or Series A. They should not wait until immediately before a fundraising round to establish such relationships. Opening a dialogue well in advance allows both sides to gauge mutual fit and clarify what the investor can offer.
At the very end of the session, Chang made a major announcement: ExBorder Partners plans to open a Tokyo office. The move signaled the firm’s deeper commitment to Japan and could create additional opportunities for growth-stage companies seeking capital and strategic guidance. He invited founders and other ecosystem participants to visit the Tokyo office.
1 In September 2025, the Tokyo Stock Exchange announced tighter continued listing requirements for the Growth Market. Under the current rules, companies must maintain a market capitalization of at least ¥4 billion 10 years after listing. From March 1, 2030, the threshold will rise to ¥10 billion five years after listing.
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