Investor Stage, under the SusHi Tech Tokyo 2025 (“STT2025”) conference, strives to foster greater connections and networks between global venture capital firms (VCs) and Japanese corporates, with the goal of facilitating greater overseas investment in Japanese startups.
We interviewed Mr. Tetsuya Mori, New Business Development Director of Emerald Technology Ventures (hereinafter referred to as "Emerald"). Emerald is scheduled to speak at the Investor Stage.
Headquartered in Zurich, Switzerland, the company has been driving innovation in industries for more than 25years with the concept of investing for a sustainable future.
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Tetsuya Mori, New Business Development Director, Emerald Technology Ventures.In his current role, Tetsuya focuses on helping business creation from scratch for its LPs, through open innovation methodologies. He is also responsible for identifying opportunities, providing deal assessment, supporting deal monitoring, and supporting deal structuring and closing together with the wider Emerald team. Before joining Emerald, he served as CEO of Sumitomo Plastics America, located in the heart of Silicon Valley. He managed the semiconductor material business and new businesses creation in the intersection of startups and multiple established organizations.
- Thank you for accepting our interview today. Could you briefly introduce Emerald Technology Ventures?
- Tetsuya: Founded in 2000 in Zurich, Switzerland, Emerald is a VC specializing in the cleantech sector. In the early days of its establishment, the cleantech sector did not attract as much attention as it did now. In the field of environmental technology, lead time from investment to return is long and uncertainty is high and the idea of cleantech businesses as viable investments was not common. Despite this, Emerald continued to pursue a balance between sustainability and financial returns and has cemented itself as one of the top cleantech investors it is today.
- What sets Emerald apart from other VCs?
- Tetsuya: Emerald has more than 50 leading global companies in their respective industries as Limited Partners (LPs). As part of LP’s new business development efforts, Emerald offers value that extends beyond investment opportunities but also encompasses business co-creation and innovation support. Of course, since we are after all a VC, earning capital gains is also important. However, Emerald focuses on not only financial returns but also on proving services that contribute to open innovation for our LPs and this emphasis I think, is what makes us different from other VCs.
- Right. That is very interesting. What is the source of Emerald’s strengths in the cleantech field?
- Tetsuya: Since its inception, Emerald has pursued sustainable returns over the long-term, with six key investments across areas Energy, Materials & Packaging, Food & Agriculture, Water & Wastewater, Industrial IT, Mobility & Urbanization. In each of these areas, we have in-house industry specialists called "Sector Specialists", who are experts in a spectrum of function from technical appraisal to business development support. We believe that our organizational structure – with a strong team of specialists in each domain – is the key driver of our competitive advantage.
- The idea of sector specialist is indeed very unique. Could you explain more about the role of these sector specialists?
- Tetsuya: When supporting open innovation for corporates in Japan, Emerald places great importance on conducting professional discussions with the R&D departments of each company. In doing so, our in-house sector specialists will directly assess the technology and marketability of the startup and provide end-to-end support from the Proof of Concept (POC) phase. While other VCs may consult with universities or external consultants in the evaluation of startups, Emerald has its own in-house technical insights, hence we can assist in speedy and actionable decision-making. We take pride in being a partner of trust for Japanese corporates.
- That is great. I understand that you focus on business creation for LPs such as Nabtesco Corporation. Could you briefly explain how that is done?
- Tetsuya: Emerald provides comprehensive support for LP's (hereinafter referred to as "Nabtesco") corporate venture capital (CVC) operations such as Nabtesco Corporation (hereinafter referred to as “Nabtesco”) and Idemitsu Kosan Co., Ltd. This initiative is called "CVC-as-a-Service". This concept is nothing new, but what sets Emerald apart is how it engages with the LP. When evaluating investments in startups, generally, VC makes investment decisions However, in Emerald’s model, taking Nabtesco as an example, Nabtesco has the final investment decision. Emerald supports Nabtesco's decision-making by undertaking other tasks, such as lead discovery, due diligence, deal negotiation and investment proposal. In the process, Emerald works closely with the in-charge responsible in each of Nabtesco's business divisions. Specifically, we engage in direct dialogues with the CEO and R&D leaders of each business division, sharing technology development roadmaps and assessing whether collaboration with startups would be the most effective way. Building on that, we pursue an approach where we address challenges – which is usually time-consuming if solutions are developed in-house – by promoting the investment in startups.
- I see. How do you envision the future of “Open Innovation” in Japan?
- Tetsuya: In today’s rapid evolving technological landscape, the limitations of closed innovation have become increasingly clear. Japanese companies have already recognized the importance of open innovation, but there remain challenges such as speed of decision-making and flexibility of development strategies. Companies in the West tend to cut sunk costs and be able to pivot quickly, but in Japan, there remains challenges due to culture. For Japanese corporates to drive greater innovation, we believe that it is essential to collaborate with stakeholders such as in-house R&D departments, university research institutes, and startups. VC and other funds play a key role in supporting companies engaged in such initiatives to accelerate innovation efforts.
- In driving innovation, it is important to collaborate with overseas players. Where do you think lie opportunities for Japanese corporates to partner with startups in Europe?
- Tetsuya: In the US and Europe, about 80% of startups exit through M&A, and there are many opportunities for acquisitions or co-development for Japanese corporates. In Europe, in addition to major cities such as London, Paris, and Berlin, innovative startups are also growing in regional cities. At Emerald, we facilitate connections between startups and Japanese corporates through investments, while also supporting partnerships such as cross-selling and co-development. Although there are language and cultural barriers, in recent years, there is an increase in personnel with overseas experiences in Japanese corporates and this represents a positive shift toward globalization.
- Japanese corporates have steadily made entrants into global markets, especially into Asia. What about Japanese startups? What are some challenges you think Japanese startups face when going abroad?
- Tetsuya: In many cases, domestic startups have not developed a strategy for global expansion, and in my view, are not yet at a stage to attract investments from overseas VCs. There is a tendency for overseas startups focus on the global market, but domestic startups are often focusing only on the domestic market. For example, the Recommendation1 submitted by the Startup Committee of the Japan Association of Corporate Directors (JACD) of which Mr Kazuhiko Toyama serves as the Chairman, points out that "there are innovations in areas including deep-tech, but Japan's unique ecosystem is optimized for local services." Many startups in Japan have enticing technologies, so by taking a global perspective and adopting a strategy that is appealing to overseas VCs, local startups will be able to attract more funding.
- Thank you for your insights! Lastly, what are your expectations for STT 2025?
- Tetsuya: This is our first time participating in STT2025 as Emerald, but we believe it is an extremely valuable opportunity that brings together promising startups and global VCs. In the past, when I attended other conferences in Japan, I saw many companies in Japan and global startups exploring potential business collaborations. Similarly, I hope that STT 2025 brings together entrepreneurs and investors united by passion and vision.
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1 "Recommendations for Advancing Japan’s Venture Ecosystem" (April 25, 2023)
Start-up Committee, Japan Association of Corporate Directors (JACD)