Growth Market Overhaul Creates New Landscape; Startups Seek Exits via M&A

The Tokyo Stock Exchange's revision of the Growth Market listing maintenance criteria announced in April 2025 has significantly impacted listed startup companies. The new standard requires 10 billion yen or more in market capitalization within 5 years of listing, a substantial increase from the previous requirement of 4 billion yen within 10 years. This change puts over 400 of the roughly 610 Growth Market companies at risk of non-compliance. Startups are seeking alternative paths through M&A and enhanced investor relations. Strategic management focused on institutional investors' perspectives has become critical for future growth.