German startups are betting big on Japan. Should the rest of Europe follow?

German startups are increasingly looking towards Japan as a destination for international expansion, industrial partnerships and technological cooperation.

From DefenceTech and nuclear fusion to quantum computing and space infrastructure, recent developments suggest that Tokyo is becoming an important partner for some of Europe’s most ambitious technology companies.

This momentum became particularly visible today, during German Chancellor Friedrich Merz’s visit to Japan. Munich-based Proxima Fusion announced two Japanese partnerships, while drone manufacturer Quantum Systems unveiled agreements with Mitsubishi Chemical and Panasonic, alongside plans to establish a permanent presence in Tokyo.

The announcements form part of a wider diplomatic push. According to Japanese news agency Jiji Press, Germany and Japan were expected to sign 33 memoranda of understanding (MoUs) spanning AI, nuclear fusion and other advanced technologies.

However, the more interesting story for Europe’s startup ecosystem extends beyond a single diplomatic visit.

More than handshakes

For Quantum Systems, the visit marks a step towards becoming an established player in Japan’s DefenceTech market.

Founded in 2015 in Gilching by Florian Seibel, Michael Kriegel, Tobias Kloss and Armin Busse, Quantum Systems develops unmanned aerial systems and software for defence, security and civilian applications.

The company announced the establishment of Quantum Systems Japan K.K., including a Tokyo office, alongside MoUs with Mitsubishi Chemical and Panasonic. The agreements aim to combine Japanese manufacturing capabilities with German drone technology, strengthening local supply chains and bringing Quantum Systems closer to Japanese customers.

Sven Kruck, co-CEO of Quantum Systems, said: “Japan has understood where defence is heading: unmanned systems, rapid innovation and the industrial capacity to deliver at scale. Ukraine has shown why this matters. When personnel are scarce and threats evolve fast, technological advantage is decisive. Japan’s manufacturing strength and our operational experience are a powerful combination. We are proud to put down roots in Japan and honoured to help strengthen its defence industrial base.”

Meanwhile, Munich-based Proxima Fusion, founded in 2023 as a spin-out from the Max Planck Institute for Plasma Physics, announced two separate agreements involving fusion energy.

As EU-Startups reported earlier today, its agreement with Kyoto Fusioneering focuses on plasma-heating systems and fuel-cycle technologies. A separate agreement with Fujikura explores industrial-scale manufacturing of superconducting tape in Lower Saxony, building on a previously announced €140 million manufacturing initiative.

The cooperation also extends into space. Established German aerospace group OHB signed an MoU with Japanese space-tech company Astroscale, founded in 2013, to explore opportunities in orbital servicing, surveillance and space security. Astroscale, on the same day, also announced a €17 million (£15 million) MOD Contract from the UK Government.

Tokyo was already calling

The latest announcements are part of a broader trend we’v seen here at EU-Startups.

Munich-based defence AI startup Helsing, founded in 2021, has already been pursuing opportunities in Japan. In August 2026, Reuters reported that Japanese conglomerate Rakuten was helping Helsing pursue a potential contract to supply unmanned systems to Japan’s military. Its HX-2 strike drone was undergoing testing by Japan’s Ground Self-Defence Forces.

Industrial cooperation has also attracted Japanese capital into Germany. In March 2025, Panasonic announced a €30 million equity investment in Munich-based tado°, founded in 2011, expanding an existing partnership combining Panasonic’s heat pumps with tado°’s smart heating controls and energy management software.

Quantum computing provides another example. Braunschweig-based QUDORA Technologies, founded in 2021, established a Japanese subsidiary and partnered with Fixstars in May 2026 to make its quantum computing tools accessible through a cloud platform.

By October, QUDORA Japan had been selected for a government-backed research project alongside Kyocera and Japan’s National Institute of Advanced Industrial Science and Technology.

Even outside DeepTech, German companies have recognised the opportunity. Cologne-based translation technology company DeepL, founded in 2017, established a Japanese subsidiary in 2023 to strengthen its local commercial operations.

These developments suggest that Japanese partnerships are becoming an increasingly deliberate part of German startups’ international strategies.

Why Japan, why now?

Japan’s strengths in electronics, robotics, precision engineering, advanced materials and industrial manufacturing offer European startups capabilities that can be difficult and expensive to develop independently.

For companies building fusion reactors, quantum computers or advanced robotics, access to established manufacturers and specialised suppliers may be just as valuable as attracting new customers.

Japan has also been working to strengthen its startup ecosystem. Its five-year startup development plan, introduced in 2022, set an ambitious objective of increasing annual startup investment to approximately €56 billion (¥10 trillion) by the 2027 financial year.

Meanwhile, cooperation between Brussels and Tokyo is expanding. In May 2026, the EU and Japan agreed to deepen collaboration in AI, quantum technology, semiconductors, digital infrastructure and cross-border data flows.

The Tokyo test

Despite the momentum, Japan is not necessarily an easy market to enter.

Language barriers, different business practices, complex procurement processes and the importance of long-term corporate relationships can make expansion challenging, particularly for startups with limited resources.

The experiences of Quantum Systems, Helsing and QUDORA highlight one possible solution: finding established Japanese partners rather than attempting to navigate the market independently.

German startups appear to have recognised the opportunity Japan offers foreign tech and talent. The question now is whether the rest of Europe will follow.

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