Beyond Borders - Scaling into Japan and APAC with Headline Asia

Latest insights, trends, and stories from our extensive network of startups, founders, and experts.?

Here’s what you can expect in this edition:

• Venture Radar - Companies we like and are tracking.
• Japan Market Pulse - Top news from APAC and Japan.
• On the ground - Key takeaways from our events.

Want to dive deeper? Each section is crafted by our investors—connect directly with them for exclusive insights and tailored advice throughout the newsletter.

AirKamuy Inc. is a Japanese defense tech startup specializing in developing and manufacturing small, inexpensive, cardboard fixed-wing drones.

Japan's defense budget for 2024 has risen to 1.6% (up from ~1.4%) of its GDP, moving closer to the 2% target commonly seen in Western economies. This increase paves the way for defense tech startups like AirKamuy to secure funding and develop the next generation of defense technology in Japan.

株式会社BANKEY is a Japanese fintech company focused on revolutionizing bank account payments. Its key product, "Pay by BANK," is a SaaS-based real-time payment solution designed to make direct bank-to-bank (A2A) payments easier and more flexible.

Japan's A2A payment infrastructure remains underdeveloped compared to much of the West, largely due to legacy payment systems, regulatory hurdles, and a cultural preference for cash. However, as these factors begin to shift, it will be interesting to see how payment infrastructure evolves in the country. BANKEY is well-positioned to capitalize on this transition and the emerging opportunities in the A2A payment space.

Protos Labs is an AI-driven cyber risk analytics platform, helping insurers underwrite cyber risks and providing enterprises with real-time risk governance capabilities.

Asia has become a prime target for cybercrime due to its weak infrastructure, limited education, and fragmentation across the region. Standalone software solutions are often difficult for local businesses to adopt. Protos Labs stands out by offering a unique combination of software solutions while co-creating value-added offerings through strategic partnerships tailored to the region’s needs.

Xweave.io provides 24/7/365 just-in-time transaction settlements combined with optimized routing for the best FX and local rates.

B2B cross-border payments have been a significant pain point, particularly for exotic currencies. FX risk is real, and having real-time settlements into banks, e-wallets, or cash offers end-users flexibility and can reduce operational costs for the sender.

Cube offers market data and insights for SEA’s online retail and consumer brands by aggregating data across major platforms like Shopee and TikTok, using proprietary analytical models.

Curious about the next breakout startup or how our Launchpad finalists are shaping the future of tech?

Connect with Jeremy Kai Proctor , Jennifer Lin , Jackson Loo & Kate L. to dive deeper into our tracking process and discover the top emerging companies in APAC.?

Japan’s Biggest IPO in 6 Years – Tokyo Metro Raises $2.3B

Tokyo Metro Co. raised ￥348.6 billion (US$2.3 billion) in Japan’s largest IPO since SoftBank’s 2018 listing. The IPO boosts Japan's market, which has raised $1.6 billion in 2024 so far. The listing is set for October 23, with the government halving its stake. Strong demand from both global and domestic investors signals high interest in this major offering. Nomura, Mizuho, and Goldman Sachs led the transaction.

This IPO highlights growing investor confidence and marks a positive turn for Japan’s capital markets—a much-needed bright spot given the dearth of IPOs and liquidity in recent years. It could spark more public listings, supporting the Tokyo Stock Exchange’s efforts to attract startups from across APAC.

OpenAI to Establish Singapore Office

OpenAI, the company behind ChatGPT, is expanding its presence in Asia with plans to open a new office in Singapore, marking its second regional location after Japan. Recruitment efforts are already underway, signaling the company’s commitment to growing its influence and collaborations throughout Asia.

Outside of China, APAC largely lacks a clear leader in large language models (LLMs), unlike Europe with Mistral or the US with OpenAI / Anthropic / Google. It will be intriguing to observe whether these established global players will dominate the Asian market or if a new contender will emerge from the region to lead in AI development. The potential for a local "rising star" could reshape the AI landscape—especially given the demand for sovereign AI.

Chinese Robotaxi Pony AI Files for U.S. IPO

On October 17, Pony AI, a China-based autonomous driving firm with Toyota as a major backer, filed for an IPO in the U.S., signaling increased investor interest in new listings and easing regulatory pressures. Pony AI reported revenue of $24.7 million in the first half of 2024, nearly doubling from the previous year, despite a net loss of $51.3 million. The company operates over 250 robotaxis with significant autonomous mileage. Pony AI plans to list on Nasdaq under the ticker "PONY," with Goldman Sachs and other major banks underwriting the offering.

The IPO of Pony AI represents two things: the increasingly rare IPO of a Chinese startup on NASDAQ and the impending mass-market commercialization of autonomous vehicles after a decade-plus long wait. This is exciting news and highlights the global nature of competition in this space.

Wise Becomes First Foreign Firm with Direct Access to Japan’s Payment Network

Fintech startup Wise is the first foreign company to gain direct access to Japan’s bank payment clearing network, the Zengin system. This allows Wise to bypass intermediary banks, cutting fees and processing times for cross-border payments. With Japan having the highest remittance fees among G7 countries (6.94% on average to send $200), Wise’s lower fees—averaging 0.59% globally—could disrupt the market and challenge local banks.

Wise’s entry represents a significant milestone for Japan’s payment landscape, potentially ushering in more competition and lower costs for cross-border remittances—a long-awaited development in Japan’s highly traditional banking industry.

Curious about the latest developments shaping the APAC tech landscape? Connect with Kenneth Jeng & Jeremy Kai Proctor to dive deeper into the trends that matter most.

Singapore Roundtable

A curated lunch discussion between founders and Headline - Asia + Lightspeed investors on go-to-market execution and expectations for international growth.

Key Highlights

• Ambitious founders in Singapore are increasingly building, from Day 1, for markets beyond Southeast Asia. Encouraged by investors, founders are looking to larger, more developed markets—especially outside of consumer plays.
• Driven by abundant capital, many companies in Southeast Asia expanded across borders prematurely and failed to find product-market fit. The current cohort of founders is finding more success by judiciously investing in international growth only after identifying strong signals of market demand.
• Regional investors have become more sophisticated about the realities (and difficulties) of market expansion. While risk capital is scarcer in Southeast Asia than it was in the past 3-4 years, founders with a clear narrative still find fundraising feasible.

Reach out to Kenneth Jeng & Jennifer Lin to find out when and where our next event is happening. Whether you’re looking to network, learn from industry leaders, or gain insights on the latest trends, we’d love to have you join us at our upcoming gatherings in APAC.

Don’t miss next week’s edition as we continue to bring you the latest trends, emerging startups, and exclusive event insights. Until then, feel free to reach out to our team—let’s keep the conversation going and make the next big opportunity yours.

As always, have a great week!

— The Headline Asia Team