GBAF 2022 Report: Exploring How We Can Help Startups Grow Rapidly

Written by the Universe editorial team

The “Global Brain Alliance Forum 2022 (GBAF 2022),” Global Brain (GB)’s annual conference, was held on December 9, 2022. In-person sessions also took place for the first time in three years.

As 2022 was marked by the impact of the Russian invasion of Ukraine and global inflation on the investment market, the event program was designed to provide insights into market perspectives and innovations that are needed in times of uncertainty. In this article, we bring you the highlights of each session.

Changes in Investment Environment and GB’s New Strategy

First, Yasuhiko Yurimoto, President & CEO of GB, introduced the changes in the investment environment. The EU market is in a devastating situation particularly for the pre-IPO and IPO markets due to the prolonged COVID-19 pandemic and the Russian invasion of Ukraine, monetary policies, and other factors. However, he explained that we do not need to be too pessimistic as he sees this trend will not last for a long time based on statistical data and GB research team’s analysis.

Meanwhile, the Japanese market has almost been unaffected by the Russian invasion of Ukraine. However, VC fundraising is slowing down, and the risk money supply may decrease in 2023. In addition, one of the largest issues surrounding Japanese startups is that their initial market capitalization does not increase compared to that of other countries, meaning that it is difficult to generate capital gain through exits, making investment in overseas startups essential for high return.

Given that the supply of risk money to Japanese startups is expected to fall, this is a great investment opportunity for Corporate Venture Capital (CVC) funds that have already been formed. In addition, this is actually an opportunity both for Japanese VCs and CVCs, as foreign investors who are facing tough economic situations in their own countries have hardly entered the Japanese IPO market.

In the afternoon, Yurimoto explained GB’s new strategies. GB will discover startups with the potential to generate higher returns by predicting high-performing regions and sectors around the globe. He also talked about GB’s organizational status and future expansions of overseas offices.

Accelerator Program: From Web3 to Medical Care, Startups Pitched on Stage

In 2022, GB launched its first accelerator program, “XLIMIT.” After an introduction of the program by Hogil Doh who is in charge of the program, six startups that were selected for the program pitched their businesses on stage. They were from a wide range of sectors including Web3 service, SaaS supporting corporations’ digital transformation, and medical device development.

• More details of this session will be covered in another article.

Trends to Watch in “Medical/Healthcare” Sector

The medical/healthcare sector, attracting more attention globally, is one of the sectors that GB is particularly focusing its efforts on. In this session, our venture capitalists who are well versed in the medical service / healthcare sector talked about the latest trends. They also introduced GB’s efforts to build connections with promising overseas medical / healthcare startups.

• More details of this session will be covered in another article.

Blockchain Business Needs New Ideas

How can we create new businesses with blockchains? Various companies are exploring business opportunities for blockchains whose market is estimated to attain JPY 11.3 trillion (USD 77.9 billion) in 2030.

In response to this current situation, Muuto Morikawa, CEO of Ginco Inc. (Ginco), a general developer behind Web3 expansion, was invited as a guest speaker to GBAF 2022 to share his perspective on how blockchain could create a new economy in the future.

He introduced various keywords and ideas such as DeFi, DAO, and tokens using blockchain technology, and defined "Web3 as the generic term for the innovations encompassing these items.” He explained the importance of shifting from the concept of unit economics to token economics.

In addition, he says that for companies to acquire Web3 users, they also have to be aware of investors involved in tokens. He concluded by saying, "In utilizing Web3 for business, it is important to co-create value not only with users but also with investors and other stakeholders.”

Why Metaverse Is Japan’s “Last Resort”

Kato, CEO of Cluster, Inc. (Cluster) that operates one of the largest metaverse platforms in Japan, explained that many companies were considering how to use the metaverse, same goes for Web3. Kato described the metaverse space, its users, and how companies could utilize it.

He said that there was no clear definition of the metaverse but described it as "an era in which people can live in a world created by computers.” As examples of “daily life” in the metaverse, he mentioned people chatting in a space that resembled a bar, exercising in an open space, and enjoying romantic relationships.

Metaverse is not only being used by individuals but is also increasingly used by corporations. Examples include the “Virtual Shibuya” project to reproduce Shibuya’s scramble crossing, a 3D world made out of a 2D game, and a reproduction of universities and event venues in the metaverse.

While the use of metaverse is expanding in such ways, its core is the game development technology. He emphasized that the key to survive the competition was how to secure excellent game engineers. He added, “Japan has a large number of game companies and is tolerant of avatar culture, along with many IPs that are globally popular,” highlighting how the metaverse industry could be a strong weapon for Japan.

When and How Startups Should Aim to Go Global

For startups aiming for significant business growth, overseas expansion should be on their list. We spoke with Japanese startups possessing world-class advanced technologies about their strategies for competing globally.

Jin Tomioka, CEO of Telexistence Inc. (Telexistence) that develops remote-controlled artificial intelligence robots; Taka Nagao, Co-Founder and CEO of Kyoto Fusioneering Ltd. (Kyoto Fusioneering) that aims to realize nuclear fusion energy; and Keito Nakao, CEO and CTO of New Innovations Inc. (New Innovations) that develops AI-driven robotics joined the conversation.

As for when to expand business overseas, Tomioka stated that it is "when we become a unicorn in terms of our revenue growth and our revenue.” He also mentioned the importance of organizational development for overseas expansion, saying that they are able to smoothly communicate with overseas customers as they have organized the company in view of global expansion since the start of the company.

Regarding the difficulty in localization when expanding overseas, the CEO of New Innovations Nakao said, "Of course there are difficulties, but our business structure does not require anything special for going global. However, factors such as whether it is possible to replace humans with robots or how personnel expenses are considered largely differ among countries. You have to look at those market characteristics.”

As for working with large companies in overseas strategies, all companies voiced their expectations for support such as sales promotion and overseas branch networks. In addition, the CEO of Kyoto Fusioneering commented that he would also appreciate solutions for temporary needs. Specifically, he said he would appreciate support for coping with working environment changes specific to startups, such as offering rental office space as the company expects to triple its workforce in the next six months.

How Large Corporations Collaborate with Startups

CVCs are not only required to achieve financial returns by investing in fast-growing startups but also need to consider business returns by collaborating with startups.

In this session, CVC fund members at KDDI Corporation (KDDI) and Mitsui Fudosan Co., Ltd. (Mitsui Fudosan) explained the points to consider when launching a business with a startup.

The CVC jointly established by KDDI and GB has invested in Mirrativ, Inc. (Mirrativ), a startup operating a game streaming platform. Mirrativ has collaborated with “povo,” KDDI’s new brand, to launch a promotion project in which povo gives out free data to Mirrativ game streamers.

Shunpei Tatebayashi, General Manager of Business Incubation Promotion Department at KDDI explained that the major reason for selecting Mirrativ for collaboration from countless streaming platforms was that they had a common vision of establishing a creator economy. He stressed the importance of both sides having the same objective.

Mitsui Fudosan also has a CVC with GB. In the session, collaboration with SUPER STUDIO Inc. (SUPER STUDIO) that operates “ecforce,” a SaaS-based e-commerce shopping cart system, was explained.

ecforce’s main customers are D2C brand companies. Many of these brands consider opening physical stores when expanding their businesses. However, data between e-commerce sites and stores are not connected, which makes it difficult to understand the ROI for opening stores. To address this issue, Mitsui Fudosan and ecforce have built a system to visualize the ROI by linking ecforce’s digital data to brands that opened stores in the real-estate company’s shopping malls .

There are already some brands utilizing this service. “GO WITH WHITE,” a sneaker brand, opened a pop-up store at “MIYASHITA PARK” commercial facility of Mitsui Fudosan. The store has no cash registers, and visitors purchase items using ecforce’s e-payment method. This has enabled the brand to understand LTV and ROI for opening a physical store including e-commerce site sales results.

Yohei Kamikubo, a member of the Venture Co-creation Department of Mitsui Fudosan who drove this initiative forward explained that “making friends in the company” was important in collaborating with startups. He said that the key to successful CVC operation was to involve employees who were willing to do something innovative.

And the Winners of the 2022 Pitch Battle Are…

In this year’s pitch battle, eight startups in prominent sectors that GB funded over the past year pitched on stage.

• More details of this session will be covered in another article.

36 Next-generation Startups Got Together

After the main session, a networking party was held in which 36 next-generation startups explained their products and services at their booths, bringing together companies from a variety of sectors including Web3, metaverse, FinTech, HR Tech, healthcare, and more.

Yano, CEO of YuaBread, Inc., commented on the networking party. "This is a rare opportunity to talk directly with LPs and business companies and obtain direct information.” Perhaps because this was the first time in three years that the event was held, I saw people communicating very proactively at many booths.

We hope that GBAF 2022 and the networking party will bring more innovations.