(Bloomberg) -- Fundraising through initial public offerings in Japan is drying up, in contrast to a dealmaking boom across Asia, after regulatory changes and a dearth of artificial intelligence related companies depleted up the listings pipeline.
The number of first-time offerings fell to 32 through the end of September, the lowest nine-month tally since 2012, according to Bloomberg-compiled data. Companies including taxi app provider Go Inc. slid to a four-year low, even as fundraising surged in the rest of Asia.
While companies along the AI supply chain have driven dealmaking around the world, Japan is yet to match the wave of startups that can capture the imagination of investors, like in China. Some IPO hopefuls were also deterred by the Tokyo Stock Exchange’s plan to raise the bar for companies to remain listed in its startup section, as port of its effort to attract more quality issuers.
“More companies decided now is not the time to go public,” said Masahito Watanabe, head of IPO department at Mizuho Securities Co., adding that it takes at least two to three years to prepare candidates for a listing in Japan.
From 2030, the Tokyo bourse will require companies on the Growth Market to have a market value of at least ¥10 billion ($63.2 million) after five years to remain listed, compared with the current requirement of ¥4 billion after 10 years.