As Japanese IPOs plunge, a route opens for trading unlisted shares in the U.S. and U.K.

【Financial News Tokyo = Correspondent Seo Hye-jin】As initial public offerings (IPOs) by Japanese startups decline, a route is opening for trading unlisted shares in the United States and the United Kingdom. Companies will be able to delay going public to build scale, while founders and early investors can sell their stakes before an IPO and recover their investments.
According to Yomiuri Shimbun on the 28th, 22 companies newly listed on the Tokyo Stock Exchange (TSE) from January through August this year. That was the lowest figure for the same period since 2023, when all three markets—the Prime, Standard and Growth markets—were operating throughout the year. The Growth Market, where startups primarily list, saw the number fall to 15 from 21 during the same period last year. Prime Market listings dropped to zero from two, while Standard Market listings rose to seven from six.
One reason companies have become more cautious about IPOs is the tougher requirements for maintaining a listing. Starting in 2030, the TSE will raise the Growth Market requirement from market capitalization of at least ¥4 billion 10 years after listing, or approximately ₩34.536 billion, to at least ¥10 billion five years after listing, or approximately ₩86.34 billion.
According to the NLI Research Institute (NLI), 403 companies—about 70% of those listed on the Growth Market as of the end of August this year—had market capitalizations of less than ¥10 billion. NLI researcher Chizuru Morishita noted, "More companies are seeking to build scale through mergers and acquisitions (M&A) before going public."
If IPOs are delayed, founders and investment funds must also wait to recover their capital by selling their stakes. Against this backdrop, a new channel is opening for them to sell stakes to overseas investors even before a listing.
According to Nihon Keizai Shimbun (The Nikkei), HiJoJo Partners, a securities firm backed by major Japanese financial groups and others, plans to broker trading in unlisted shares of Japanese companies in the U.S. and U.K. markets by the end of this year. This will be the first time a Japanese financial institution has brokered transactions in an overseas unlisted-share market.
The trading venues are Nasdaq Private Market in the United States and Venturebeam in the United Kingdom.
HiJoJo Partners will connect startup founders and investment funds seeking to sell their stakes with overseas institutional investors. It will also broker shares held by university funds that have invested in university-originated startups. The firm plans to advise on sale prices and prospective buyers while taking into account the companies' preferred capital policies and shareholder structures. Fidelity Investments and GIC (Singapore's sovereign wealth fund) are among the participants in these markets.
With overseas institutional investors participating as buyers of unlisted stakes, existing shareholders can recover their investments before an IPO, while companies gain more time to decide when to go public. HiJoJo Partners received approval under a special system for unlisted-share transactions established last year by the Financial Services Agency of Japan.
According to U.S.-based Jefferies Financial Group, global trading in unlisted shares, excluding new share issuances and other transactions, is expected to reach $260 billion this year, up 8% from the previous year, or approximately ₩354 trillion.
[email protected] Seo Hye-jin Reporter