ICT Startup League

The 6th Startup League Academy was held in Tokyo on November 26th.

Prior to the main session, Mr. Tadashi Fukuda, Head of Operations, reported on the progress of the Academy. He noted that the high frequency of twice-monthly meetings has led to an increasing number of participants and that successful business matches between companies are beginning to emerge. Additionally, he confirmed the project's smooth progress, citing a positive outlook expressed by the Ministry of Internal Affairs and Communications (MIC).

Following this, Mr. Kunio Noma from the Ministry of Internal Affairs and Communications was introduced. He encouraged the participants, stating, "We take your rising expectations seriously and will continue to devote our efforts to supporting you."

■ Talk Session: "Exit Strategies Beyond TSE Growth"

For this talk session, we welcomed Mr. Junji Yamada from the Nagoya Stock Exchange (NSE) as a guest, with Mr. Yoshinori Sasaki from the Operations Committee (Executive Officer at Gaiax Co., Ltd.) serving as the moderator.

Mr. Sasaki, who is involved in the startup studio business, supports entrepreneurship from the idea stage, providing support and partial investment before connecting startups to venture capitalists to boost business growth. At the beginning of the session, Mr. Sasaki explained the intent behind the theme.

Of the 70-plus companies his firm has invested in so far, only five have reached an IPO. "Given the recent situation in the TSE Growth Market, exits have become extremely difficult. Therefore, we investors and supporters have come to believe that securing returns is tough if we rely solely on the traditional TSE Growth exit strategy." Expecting that diversity in exit strategies will be crucial in the future, he expressed hope that participants would deepen their understanding of stock exchanges other than the Tokyo Stock Exchange (TSE).

Guest speaker Mr. Yamada, as the head of the "Listing Promotion & Entrepreneur Support Group," is involved not only in promoting listings but also in post-listing support such as IR and recruitment assistance. He also works with companies aiming to list for recruitment purposes, not just fundraising. The Nagoya Stock Exchange is one of Japan's four stock exchanges and stands alongside Sapporo and Fukuoka as a regional exchange (excluding TSE). Mr. Yamada explained its characteristics, concepts, and initiatives clearly through a Q&A format.

Point 1: Characteristics of the Nagoya Stock Exchange

・No Regional Restrictions: Area restrictions were abolished in 2000, allowing companies from all over Japan to list.
・Focus on Individual Investors: Since the market restructuring in April 2022, it has been clearly defined as a market that values individual investors.
・Listing Track Record: The overwhelming majority of listed companies are from outside the three Tokai prefectures.

While Sapporo and Fukuoka have emerging markets, their listing requirements include area restrictions, explicitly targeting companies with ties to Hokkaido or Kyushu. In contrast, Mr. Yamada emphasized, "The NSE Next Market has no regional constraints, meaning even companies with no connection to Nagoya can list." Another key difference from the TSE, which is centered on foreign institutional investors, is the very high ratio of individual investors.

Point 2: Listing Case Studies

・ASNOVA Co., Ltd.: Market cap grew from 2.51 billion yen at listing to 9 billion yen, after which they transferred to TSE Growth.
・QLS Holdings Co., Ltd.: Market cap grew from 1.439 billion yen to 7 billion yen, achieving a dual listing with TSE Growth.
・Uridoki Co., Ltd.: Introduced as a case of a high-growth company deliberately choosing NSE, aiming to grow from 2.5 billion yen to over 4 billion yen.

While the TSE does not demand a 10 billion yen market cap at the time of listing, they have indicated that companies may face delisting if they do not reach 10 billion yen within 5 years of listing. It seems difficult for startups to attempt TSE Growth without the prospect of a certain market capitalization. However, there are cases like ASNOVA where a "Small IPO" became a successful model. For this reason, the NSE has adopted a policy of "supporting Small IPOs—which are difficult for institutional investors to invest in—by building a fan base of individual investors and aiming for a 10 billion yen market cap together."

Point 3: IR Activities for Individual Investors ("NSE IR Expo")

・One of Japan's largest IR events for individual investors with a 30-year history. This year, it was held in Tokyo, Osaka, and Fukui as well.
・10,000 individual investors visit annually, and the number of individual shareholders for participating companies increased by approximately 1.5 times (up 53.3%).

"The NSE puts a tremendous amount of effort into matching listed companies with individual investors," says Mr. Yamada. They have been holding events directly connecting the two for 30 consecutive years, with 135 companies exhibiting this year. Approximately 10,000 individual investors visited booths over two days for meetings and briefings. The "NSE IR Expo" has demonstrated a very high acquisition effect, with participating companies seeing a significant increase in individual shareholders.

Point 4: Listing Process and Criteria

・Listing is possible with a market cap starting around 300 million yen (Next Market).
・It is possible to switch from TSE to NSE in the final stages of listing preparation.

In response to Mr. Sasaki's question regarding "listing criteria, timing, and preparation," Mr. Yamada answered: "Listing on the Next Market is possible with a market capitalization of around 300 million yen. From a startup perspective, this is equivalent to a Pre-Series A valuation. As for the criteria to consider listing, the timing should be decided by comprehensively evaluating sales/profit scale, business growth potential, funding needs, management preparation, and governance structure." He also noted, "While listing preparation generally starts 3 to 4 years in advance (N-3/N-4), it is possible to switch from TSE to another market even at the N-1 or N-2 stage." He pointed out that while aiming for TSE Growth is fine, "companies shouldn't lock themselves in during the preparation phase, but should choose the appropriate market in the end."

Summary

The NSE has no regional bias, with the majority of listings coming from outside Nagoya. While there are many smaller IPOs, it has a proven track record of steadily increasing corporate value. Mr. Yamada concluded, "If you aim to raise large amounts of capital from domestic and foreign institutional investors for growth after listing, the TSE is advantageous. However, if your strategy is to list first, increase your fan base of individual investors, and shift gears for growth from there, we can provide ample pipelines."

Finally, Mr. Sasaki offered advice: "The NSE is described as a 'stock exchange with a face,' and they consult with you very personally. When considering a business sale or IPO, I recommend accessing their consultation desk casually, frankly sharing your situation and hopes, and working out specific advice and procedures together."

■ Value-Up Session

Nefront Inc.: Developing the Spatial Information Management System "IndooAR"

The first speaker of the day was Mr. Shota Imamura, Representative Director and CEO of Nefront Inc.

Business Overview and Challenge:
Founded in 2021, Nefront Inc. is participating in the ICT Startup League for the third consecutive year. With building information management as its core business, they are developing technology that integrates and visualizes dispersed information using AI and identifies positions within buildings using image analysis for navigation. Currently, they are expanding the "IndooAR" spatial information management system into a platform that improves operational efficiency for facility inspections and building developers.

Another initiative derived from "IndooAR" is the AI drawing management system "Filefront." This platform uses AI to analyze information from hundreds to tens of thousands of drawings depending on the building scale, classifying them by building and tuning the system so necessary documents can be extracted quickly. While receiving feedback and making improvements through actual operation at Obayashi Corporation sites, preparations for introduction to other major general contractors are also underway.

The ultimate goal is to realize a platform that meets global needs using current technology when the era of widespread smart glasses arrives. Current challenges include a deepening lack of funds due to bootstrapping, the need to secure talent using additional support from the Startup League, building partnerships with existing system vendors, and concretizing overseas expansion strategies.

Golden Advice from Experts:

Online participant and selection evaluation committee member Ms. Hiromi Okuda (Representative Director, Wiz Group Inc.) praised Nefront highly for having the technical prowess to say "we have this, we can produce that" in response to diverse requests, calling them a "Department Store of Technology." On the other hand, she pointed out the lack of a clear purpose or a one-line vision answering "Why do you want to expand this business to the world?" She encouraged them, saying, "Defining that will unify the company's impression and have a positive impact on engineer orientation and fundraising."

Mr. Fukuda, Head of Operations, explained that the long-term goal of providing spatial information via smart glasses could bring dramatic convenience improvements for the visually impaired. For this, the "HOW" mechanism—digitizing spatial information in advance and embedding it as a preset—is crucial. He suggested that technology adoption leads to a barrier-free world, for example, "enabling visually impaired people to walk by recognizing spatial information just like sighted people simply by wearing smart glasses." He proposed, "To realize such a world, the effective direction to aim for is to deploy an initial service through presentations or crowdfunding that present this vision to society, gathering supporters in advance to create a foundation of joint contribution."

Mr. Tetsuya Kawanishi from the Operations Committee asked about technical superiority: "What is amazing about this compared to existing indoor positioning technologies?" When Mr. Imamura cited "the point that device installation like beacons is unnecessary and location can be identified solely by the terminal's camera," Mr. Kawanishi expressed conviction in the technical merit and high precision. He also praised their business approach, noting that "having solid customers and facing real issues on-site is very noble." He then advised on the balance of the presentation: "If you show the big picture (Vision)—'What we are doing this for'—first, and then present your current track record as an example of that, it will be much easier to convey."

Fellow selection evaluation committee member Mr. Tomoe Makino (Japan Representative, Tools for Humanity) asked, "Since much image recognition is realized by AI, what functions or issues exist that cannot be done by image recognition alone?" In response, Mr. Imamura answered, "While it is easy to acquire location within a building or related documents like similar drawings, understanding the specific situation where a user is in trouble on the spot and providing appropriate context requires processing and data integration not just on the terminal but on a cloud server. Such functions likely cannot be realized well without a cloud infrastructure."

Finally, Mr. Fukuda concluded the session by requesting the production of a concept video for smart glasses to support the vision, promising, "It doesn't matter if it's within the range of what is currently possible, just make a short, clear video that conveys the content at a glance."

Vanishing Company Inc.: Operating "Blut," a Blood Transfusion Matching App for Dogs and Cats

Next, Ms. Sayaka Toki, Representative Director of Vanishing Company Inc., took the stage.

Business Overview and Challenge:
Founded in Fukuoka City in 2022, the company is engaged in the research and development of "Blut," a matching app to solve the blood shortage in the veterinary industry. Of the approximately 10,000 animal hospitals in Japan, almost none can handle blood transfusions. The main causes are the ban on selling blood products, technical and legal difficulties in preserving blood, and the inability to keep donor dogs/cats due to animal welfare perspectives. Consequently, situations arise where lives that could be saved are lost.

"Blut" is a service that automatically matches hospitals requiring blood with pre-registered donors. The hospital enters the dog/cat type, blood type, required amount (in 50ml units up to 400ml), and desired date/time. Based on this, the system determines blood type matches, weight conditions for drawing the required amount, and whether the donor is within travel range of the hospital, narrowing down and dispatching only available donors. Currently, 200 donors are registered, and they have achieved successful transfusions in Fukuoka Prefecture and secured contracts with university hospitals in Tokyo.

The main revenue comes from monthly usage fees from animal hospitals, but since Vanishing Company bears the cost of detailed inspections during donor registration, owners can use the service virtually for free. Other revenue streams include sales of surplus blood from inspections and test data to companies that need them, as well as a supporter registration fee (24,000 yen once per lifetime) for dogs and cats that cannot become donors. These are based on the company's vision that "every dog and cat is a hero who helps someone," including not only the individuals that actually save lives as donors but also the animals that support them.

Golden Advice from Experts:

Mr. Fukuda first proposed improving the service mechanism, including the revenue aspect. "How about making it a 'mutual aid registration' form where registrants can receive support from each other, incorporating the registration fee into pet insurance so that revenue enters the company through insurance premiums? If it spreads widely in cooperation with animal-loving celebrities and media, it could generate consistent revenue and become a promising stock suitable for listing."

Mr. Yamada of the NSE sympathized with the vision Vanishing Company upholds but noted its abstract nature. "When startups solicit investors broadly, it is incredibly important to clearly define the target to be saved and the issues to be solved, show a concrete strategy, and enhance the persuasive power of the vision." He advised that placing a short, easy-to-understand call to action at the beginning, such as "Register if you really want to save lives," would significantly improve transmission and impression.

Ms. Okuda, hailing from Kyushu, mentioned the lack of clarity in operational measures regarding costs associated with handover and transport after matching, noting the environmental difference between Fukuoka and Tokyo. While physical transport (like driving the donor) is feasible in rural areas, it is difficult in the city center. She advised, "I think it would be good to introduce special considerations or logistics like a 'Doctor Car.' Since treating dogs, cats, and owners with care has value beyond money, shouldn't we aim for a society that respects everyone involved, including owners, by incorporating care including transportation into the system or service?"

Mr. Sasaki from the Operations Committee stated that for a matching business connecting multiple stakeholders, designing a growth logic—determining which participants need to increase for others to naturally follow—is crucial. "Alternatively, the key will be determining whether to consciously create a mechanism where both recipients and donors grow mutually."

Finally, Selection Evaluation Committee member Mr. Toshiya Haida (Director and Senior Managing Executive Officer, IACE Travel Co., Ltd.) proposed that they should first undertake marketing to raise awareness and then recruit a broad range of supporters. "Currently, the main stakeholders are pet owners, animal hospitals, and donors, but there must be many people who don't own pets or simply want to support the cause. It is important to create a support structure that includes corporations by providing opportunities to get involved as information disseminators or support members, not limited to donations."

■ Event Summary
The networking session, eagerly awaited by participants, was a great success again this time. The venue was filled with excitement, and everyone was busy exchanging business cards and information without sparing a moment.

Evaluating today's talk session, Mr. Sasaki felt that "In a context where many participants are assumed to only know the TSE, conveying the role and characteristics of the NSE allowed us to share a broadening of options leading to the next growth opportunities."

Mr. Yamada of the NSE said he was surprised that more people than expected stayed to participate in the networking session. He commented, "I don't deny online interaction, but there is tremendous value in the exchanges born from face-to-face business card exchanges and the atmosphere of the venue. I was truly grateful that so many people gathered around me as well."

Reflecting on this Value-Up Session, Mr. Imamura of Nefront strongly stated, "Until now, I tended to focus my explanations on 'HOW,' such as our technology and functions, but I realized the need to emphasize the 'WHY' and the vision—the big picture—more. I want to improve the presentation structure to make it easier to align perspectives with investors and collaborators. As we enter a phase of personnel expansion and fundraising, I intend to organize our key appeal points to connect them to business development."

Ms. Toki of Vanishing Company said, "Since the parts I was most worried about, such as the business model and legal concerns, were pointed out precisely at the beginning, it became very easy to talk after that. I was able to map out what to do next and found clues for solutions." She also expressed joy at being able to build connections at the Academy, which she participated in for the first time.

As Mr. Fukuda mentioned at the beginning of the meeting, the Startup League and the Academy are becoming more vibrant with each session, and exchanges between participants are deepening. The community built here will surely help in the growth and development of your companies. We look forward to seeing even more on-site participants from the next session onwards.