Contrary to the global trend of declining M&A volumes since the 2021 peak, Japanese outbound M&A activity is at an all-time high, with deal values more than doubling since 2020. A majority of Japan's top corporations expect to increase overseas investments, with many targeting deals over $500 million.
The US is perceived to be falling behind in industrial automation, a sector now viewed as a key indicator of a nation's economic health and self-sufficiency. This realization is fueling a massive wave of investment into physical AI and robotics to regain a competitive edge.
Japanese CVCs like Sony Ventures and Japan Airlines Ventures differentiate themselves by offering strategic partnerships, not just funding. They provide startups with access to their parent companies' vast assets, operational expertise, and global networks, enabling real-world deployment and accelerated scaling.
In the physical AI and robotics sectors, having a hardware component is increasingly viewed as a critical competitive advantage rather than a liability. It creates a defensible barrier against pure-software competitors and de-risks the investment by creating a tangible, integrated product.
The Japanese investment ecosystem is characterized by a rigorous due diligence process that filters for robust, industrial-grade technologies over speculative, high-growth ventures. As a result, having a Japanese investor on a company's cap table acts as a signal of quality and resilience.
Keep pulling the thread on United States.