In 2017, venture financing (VF) investments in the software segment constituted 46% of the total deal value in the Japanese enterprise market, according to GlobalData, a leading data and analytics company. On the other hand, 38% of the total number of VF deals in the country was in the software segment.
According to Maruti Patnaik, Analyst at GlobalData: “VF investments in the software segment is largely in the customer relationship management (CRM) domain, as enterprises’ ICT investments are driven by the objective of increasing efficiency at their customer service end-points owing to the highly competitive Japanese enterprise market”.
VF investments in the IT service segment constitute 38% of the total deal value in 2017. The IT service segment investments are primarily focused on consumer facing enterprises, such as online lending, social networking, online media publishing, e-commerce, and online dating, among others. As Japanese technological advancements are on the forefront of global market, VF companies are investing in Japanese technology enterprises in order to expand their operations and achieve business growth.
Maruti added: “Apart from the traditional segments of software, hardware, and IT services, venture capitalist are investing in mobility-based financial smartphone applications and mobile communication application companies in Japan”.
In addition, venture financing companies are also funding Japanese start-ups engaged in wearables and smart products domain, as they have the potential to disrupt the market dynamics. Going forward, venture capitalists are going to target mobile technology start-ups that are developing consumer oriented applications for real-world use.