Japan Pushes Startups to Power the Next Biotech Cycle

In recent years, the Japanese government has rolled out a series of initiatives to reshape the country's biopharma ecosystem. These include expanded venture funding, targeted subsidies for drug development, and tax incentives for investors, entrepreneurs, and startup employees.

- Ayesha Siddiqui

With smaller companies and startups widely seen as key drivers of innovation, Japan in 2025 is stepping up efforts to strengthen its startup ecosystem and accelerate the translation of research into products.

The Japanese government has stepped up efforts to strengthen its startup ecosystem, rolling out a series of initiatives aimed at making the country more attractive to researchers, entrepreneurs, and investors. Recent measures include the launch of the J-RISE (Japan Research & Innovation for Scientific Excellence) initiative, designed to draw top scientific talent to Japan, as well as expanded support from the Japan Agency for Medical Research and Development (AMED). The government has committed JPY 350 billion (about $ 2.3 billion) to support startups, with AMED offering matching grants that can double venture capital investments for eligible biopharma companies. These policy moves are being matched by a growing flow of private capital, as biotech-focused venture funds step up their presence in the market.

Rise of biotech funds

Japan has seen a surge in large, dedicated venture funds backing biotech and life sciences in 2025. In July 2025, AN Venture Partners closed its first fund at $200 million, one of the largest Japan-focused biotech funds to date, with a mandate to invest globally while strengthening Japan's biopharma ecosystem.