Japan defense startups draw interest from U.S. venture capital

TOKYO -- Japan's defense and aerospace startups are seeing growing interest from U.S. venture capital as the government here pushes to bolster the country's defenses, while receiving less attention from investors at home, where there is a less-developed funding mechanism for the industry.

U.S. venture capital firms began expressing more interest in Japanese defense-related startups around two years ago, when Japan decided to boost its defense spending, according to an official at the Ministry of Defense's Acquisition, Technology and Logistics Agency.