[Event Report]2024 X-HUB TOKYO #2 Overseas Expansion Seminar “Taking on the Current Situation in the UK and Europe – UK and European Market Trends and Strategic Approaches” |[Sponsored by Tokyo Metropolitan Government]X-HUB TOKYO, an innovation platform connecting Tokyo with the world

X-HUB TOKYO, which supports Tokyo startups in expanding overseas, held the 2024 X-HUB TOKYO #2 Overseas Expansion Seminar “Taking on the Current Situation in the UK and Europe – UK and European Market Trends and Strategic Approaches” on July 12. The event provided an overview of the business as a whole, as well as an overview of the European market, including the UK, the latest trends, and real information on expanding into the UK.

In the first half of the event, Naoki Kamimaeda, head of the European division at Global Brain Corporation and representative of the London office, shared local information, such as an overview of the UK and European markets and the latest trends. In the second half of the event, a panel discussion was held with senior entrepreneurs who have expanded into Europe and the UK, facilitated by Kamimaeda. Yuhei Urabe, Global Business Development Manager at Tenchijin Co., Ltd., and Mao Parr, CEO of datagusto, inc., took to the stage to talk about how to draw up an expansion strategy into the UK and Europe and give advice based on their own experiences.

Introducing the UK and European Ecosystem

Global Brain Corporation Investment Group
Head of European Affairs and Head of London Office
Mr. Naoki Kamimaeda

First, we asked Naoki Uemaeda, head of the London office of Global Brain, the first Japanese venture capital firm (VC) to establish a base in Europe in 2019, for an overview of the UK and European markets. According to a report published this year by the US research company Startup Genome, many European cities, including London in the UK, Amsterdam in the Netherlands, Paris in France, and Berlin in Germany, were ranked in the top 20 of the world’s startup ecosystem rankings by city in 2024. These cities are home to some of the world’s leading startup hubs, and London in particular has been gaining recognition in recent years as a startup hub on a par with Silicon Valley and New York in the US.
A key feature of the startup ecosystem from 2023 onwards is the sudden acceleration of investment in manufacturing in Europe due to geopolitical influences. Looking at cities individually, there is a trend of increasing investment in cities with strong manufacturing industries, including Frankfurt and Stuttgart in Germany. What are the latest trends in the startup scene in the UK and Europe? I would like to share three main points. The first point is that many startups related to generative AI have been established and investment is concentrated in the UK, Germany, Israel and France. A characteristic of these startups is that many of them are founded by CEOs who are graduates of GAFA or have experience in cutting-edge AI research at UK universities.
Secondly, in light of the recent political situation, there has been lively discussion about “Defence Tech”, that is, solutions and services that use digital technologies such as cloud computing and AI to solve defense issues. Many startups are developing their businesses under a “dual-use only” policy (technology that can be used for both civilian and military purposes), and attention is being paid to the moral aspect.
The third point is that Greece is undergoing a turnaround, that is, a national restructuring and management reform, and since 2021, it has grown into an ecosystem that is attracting global attention due to the quality of engineers, living environment, prices and wage levels. When considering expanding into the UK or Europe, it is a good idea to select and prepare your destination based on these trends. Finally, please give some advice to startups aiming to expand into the UK or Europe. In Europe, laws and corporate laws vary greatly from country to country, so researching as much as possible in advance will increase the resolution of your business and services. In addition, when conducting market research, it is also useful to participate in startup events held in Europe, such as “LONDON TECH WEEK” and “VIVA TECHNOLOGY”, to gather information. In addition, Japanese government agencies and private institutions also provide various support. On the other hand, it should be noted that local government agencies are not necessarily proactive in supporting Japanese companies and Japanese startups to expand into the local market.

Panel discussion: Expansion strategies and the secrets to success in the UK and Europe

From the top left: Naoki Uemaeda, Head of Europe and London Office, Investment Group, Global Brain Corporation; Yuhei Urabe, Global Business Development Manager, Tenchijin Co., Ltd.; and Mao Parr, CEO/Founder, Datagusto, Inc.

The second half of the event will be a panel discussion. The panelists are Yuhei Urabe, Global Business Development Manager at Tenchijin Co., Ltd., and Asao Par, CEO/Founder at datagusto, inc. The facilitator from here will be Naoki Kamimaeda, Head of the London Office and European Division of the Investment Group at Global Brain Corporation. First, I would like to ask each of you to introduce yourself and tell us about your business in the UK and Europe. Yuhei Urabe (hereinafter Urabe): Nice to meet you. My name is Urabe. Tenchijin is a startup founded in 2019 that develops new businesses and satellite hardware using satellite data from space. In recent years, the business of managing water pipe leakage risks using space big data has been expanding, and we are developing services to solve the social issue of aging water infrastructure.

As for the progress of our overseas expansion, while our head office is in Tokyo, we conduct sales to Europe and Asia mainly through members living overseas. I am based in France, and we also have members participating from Australia and Guam, so we have a total of about 70 people working on the business. By conveying the needs that the sales team has heard locally to the development team in Japan, I feel that we are able to proceed with development and design that is suited to the culture and business practices of each region.

Asao Par (hereinafter, Par): Hello. We at datagusto develop SaaS-based analytical tools for developers in the field of generative AI. Founded in 2020, we are responsible for planning, developing, and consulting on AI and data-related products. We have pivoted several times to arrive at the current tool development.

As for the progress of our overseas expansion, we are currently developing our business in the UK and the US. As we advance our business in the UK, we find it very appealing that it is relatively easy to meet and talk with managers and corporate decision makers from all over the world, including the US and Europe, as they tend to gather there.

Why did you decide to expand into the UK and Europe so soon after founding your company? Parr: The main reason we decided to expand into the UK was because of the abundance of AI talent. The country is home to some of the world’s leading universities, including Oxford and Cambridge, and it feels like there are a lot of “top of the best” talent in the field of AI. It is also possible to keep labor costs down compared to places like San Francisco in the US. Another attractive point was that Japan and the UK currently have strong political ties. We also feel that the good public safety is a value that cannot be replaced with money.

Urabe: Japan is said to be a “country that is facing challenges” in many areas, but we chose Europe, especially France and Germany, as the two countries had similar problems with aging infrastructure when it comes to our water infrastructure solutions. However, when we actually entered the market, we felt that it would take a long time to provide services to local governments, which we had expected. Therefore, we are steadily building relationships of trust while sharing our track record and the global awards we have won, and moving our business forward step by step.

Finally, please give a message to all the startups aiming to expand into the UK and Europe. Parr: When it comes to expanding overseas, some people may think that they need to plan as much in advance as possible, but the reality is that there are many things you won’t know until you get there. Therefore, I recommend making a rough plan, responding flexibly according to the situation, and revising the plan each time. Also, in order to meet a good business partner, it is important to just take the opportunity to bat. Nothing will start unless you take the first step, so I hope everyone will relax a little and try to move forward with a casual attitude.

Urabe: I completely agree with Mr. Parr. The only thing you can do to prepare in advance is to ask yourself, “Do I really want to work overseas?” In overseas business, you just need to have the determination. Make sure you are prepared to continue even if it is difficult. If you can do that, the path will open up little by little by repeating the process of “acting and thinking.” Let’s all work hard together and aim for the world!

At this event, we introduced the characteristics of the UK and European markets and the appeal of the startup ecosystem. X-HUB TOKYO will continue to provide the latest information on the characteristics and appeal of overseas startup ecosystems, as well as strategic approaches for expanding overseas.