Mitsubishi UFJ Financial Group has newly established the Startup Acceleration Strategy Division. It will serve as the group's command center for MUFG Bank, Mitsubishi UFJ Securities Holdings, Mitsubishi UFJ Trust and Banking, and venture capital (*) companies in providing support that puts forward the unique culture and characteristics of the Mitsubishi UFJ Financial Group through more visible representation.
(*) Investment companies and organizations specializing in investing in unlisted companies including startups.

Mitsubishi UFJ Financial Group (MUFG) is stepping up its startup support activities. In April 2024, the Growing Industries Support Office, part of MUFG Bank, was upgraded and reorganized as the Startup Acceleration Strategy Division. Personnel from the group’s holding company also concurrently serve as members in the cross-company division. We asked Shinsuke Tsukahara, who leads the new division, about the aim of the reorganization.

"Startups will be the engine that drives Japan's industrial development in the future," Tsukahara explains. "Startups will be the ones to provide solutions to social issues. They are key to Japan's revitalization. The group's new Medium-term Business Plan, which started in April, has listed startup support as a critical initiative. As a group, we are resolved to take on a bigger role to boost startup enterprises."

For the newly established Startup Acceleration Strategy Division, what does it mean to be part of both the bank and the holding company?
"It sends the message that the initiative is not confined to the bank," answers Tsukahara. "Instead, we reach across the group, including the securities, the trust bank, venture capital, and corporate venture capital operations to accelerate integrated management. The division is, in essence, the group's control tower."

So far, each group company has been promoting startup support separately while coordinating with each other. Still, they sometimes found out about each other's activities through media reports. Also, the companies tend to offer support in different manners from each other. They concluded that the group can develop closer and better working relationships with startups if the group companies align their efforts and provide support in a more integrated and visible manner. The coordinated approach will help MUFG demonstrate its seriousness to society.

Tsukahara was appointed head of the Startup Acceleration Strategy Division after working as the branch manager of the Azabu and Shibuya branches. Both offices cover the Roppongi and Shibuya areas with a heavy concentration of startups. Tsukahara has directly supported startup entrepreneurs through business strategies and cash-flow management.
Currently, the division has a staff of around 40 personnel. In addition to Tokyo, there are offices in Nagoya and Osaka. The staff is divided into two groups. The Business Promotion Department directly supports startups, and the Planning Department plans and promotes measures to contribute to MUFG's overall support for startups. They work with the Startup Acceleration Division, a frontline force of over 20 people.

“So far, the bank has played the main role in startup support. Now we plan to assemble professionals from each group company, such as the securities, the trust bank, and venture capital, on an on-loan basis to work together in the same location. We hope to put more MUFG characteristics forward and reinforce areas expected of us,” says Tsukahara.

So, what exactly are those MUFG characteristics?
The first is internationality and global reach. The goal is to be the financial institution which anyone who wants to venture overseas turns to first.
The second defining characteristic is collaboration with major corporations. The group's customer base with a large number of major corporations is one of its strengths, enabling us to take a multifaceted approach to supporting collaboration between established corporations and startups, including open innovation.
The third is M&A. For 70% of Japanese startups, the exit strategy is an IPO (initial public offering), while 90% of American counterparts choose M&A. Of course, an IPO serves as an indicator of success for entrepreneurs. However, in many cases in Japan, a small startup goes public and fails to accelerate its growth afterward. It is a fact that M&A becomes necessary to stay competitive on the world stage.
The fourth is finance, particularly debt financing, which is at the core of the business. We aim to provide more flexible and larger-scale financing. By strengthening in these areas, we will enhance MUFG's uniqueness.

So, what is Tsukahara's take on the current startup trends?
"The Kishida administration announced the 'Startup Development Five-Year Plan' in 2022, with the major goal of increasing investment in startups by tenfold over the next five years and creating 100 unicorn companies (*)," Tsukahara says. "However, after a couple of years, the number of unicorn companies has remained flat, and investment has decreased slightly. Still, Japan's situation is not so bad as we have not been affected much by interest rate hikes or inflation compared to the United States. Regulatory reform is progressing as well, so I expect we will make a comeback."
(*) A privately held startup with a valuation of $1 billion or more

That said, there is also a startup polarization in Japan. Funding is concentrated on the startups considered doing well, while the rest are kept on the back burner. Nonetheless, various subsidies and support measures are available to entrepreneurs, making it an environment favorable for starting a business.

Tsukahara continues: "If our goal is to foster startups in Japan that compete on the world stage, the IT startups' competition would be the IT digital giants collectively known as GAFAM (Google, Amazon, Facebook, Apple, Microsoft). Formidable opponents. If we seek a winning strategy, where should we look? I think the most promising areas are deep tech fields such as nuclear fusion based on university research assets, but startups in these fields still need time to grow. That is why we must recruit talented managers and provide large-scale support. We want to commit ourselves to this area."

The number of young people in Japan who want to start their own business is increasing compared to the past. However, there is no point in calling yourself an entrepreneur if you cannot manage the company so it survives. Tsukahara, previously a branch manager, describes the requirements for a business's survival:
"Many in the deep tech field have a research background, and the company's survival depends on their technical skills. However, in the digital IT field, a company's survival ultimately depends on the strength of its manager. The manager must have the flexibility to change the content of their business in line with changes in the business environment. The individual's management ability is more important than the business model. The strength of the team is another crucial factor. It includes the team's ability to procure funds. You can achieve what you start out to do only when you have an able manager and a solid team."

In fact, the problem with Japanese startups is the shortage of talented managers. There are plenty of supporters, but qualified and skilled startup managers are still lacking. Historically, most innovations in Japan have originated in large corporations rather than startups. Tsukahara points out that if startups have more successful innovations in the future, it will transform Japan.

"To accelerate the development of Japanese industry, I think it is important to take steps such as having successful cases of Japanese startups and attracting global wisdom and innovation to Japan, including overseas startups," he says. "Maybe foreigners will start businesses in Japan. Japan is safer than many other countries and easy to live in. We need to attract superior talents to Japan using these merits as important selling points."

The MUFG Startup Acceleration Strategy Division is working on various support measures. According to Yuka Kimura and Masaki Shudai of the division's Planning Department, it is preparing to host the MUFG Startup Summit at the Tokyo International Forum on December 19th and 20th this year. "We are planning special lectures and business matching opportunities with major corporations. Many similar events are being held, but we want to make this one from which participants can take practical and valuable ideas home."

In May this year, the “MUFG Startup Kit ( https://www.bk.mufg.jp/houjin/lp/startup_kit/)” was released for those aspiring to start their own business. The kit includes a comprehensive list of support services indispensable for startup growth. It provides startups which have newly opened or have yet to open an MUFG Bank account with one-stop services on the web page, including payment, fund management, and shareholder management services each MUFG company offers. Those entrepreneurs who previously thought MUFG was hard to approach may receive these services as welcome news. We hope aspiring entrepreneurs will leverage the trust the Mitsubishi Group enjoys to reach the next level.