TOKYO—The University of Tokyo, long considered a breeding ground for Japan’s political and business elite, is venturing into new terrain: entrepreneurship.
The nation’s most prestigious university, known as Todai, has produced more than a dozen prime ministers and most of the top officials at government ministries. But in recent years, the 138-year-old school has been working to shake its conservative image and bring some Silicon Valley spirit to its campus, in line with Prime Minister Shinzo Abe’s hopes to transform educational institutions into centers of innovation.
The university counts about 240 startups affiliated with it in some way, double the figure five years ago. Sixteen have gone public, with a combined market capitalization of about $8 billion.
Todai’s efforts suggest Japan is finally embracing entrepreneurs as its once-dominant technology industry contends with decline on many fronts. But there is still much catching up to do.
Last year, Japanese venture-capital investments totaled $940 million, according to the Tokyo-based Venture Enterprise center. That compares with the $48 billion invested by venture capitalists in the U.S., according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association.
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“Todai graduates often find careers in the government or large corporations,” saidTomotaka Goji, president of University of Tokyo Edge Capital, a venture-capital firm that invests in technology startups. “But I’m sensing a change in attitude. I’m witnessing many more people who seriously consider working for or starting a venture business an appealing career choice.”
Mr. Goji’s office is located in a modern five-story building sitting on the southern edge of the university’s main campus in central Tokyo. Funded by institutional investors independent of Todai, UTEC manages about ¥30 billion, or roughly $250 million, in venture-capital funds.
The building is also home to a Todai subsidiary that handles licensing of technologies developed at the university. As the number of ventures grow, patent revenue has more than tripled since 2010 to ¥488 million in 2014.
Shigeo Kagami, a Todai professor who works with the commercial entities to support entrepreneurs, said Todai often receives equity in return for licensing university-developed technology to startups, which can be a valuable asset if companies successfully list their shares.
“That has helped Todai warm up to the idea of entrepreneurship—it realized it could be profitable,” he said.
The 240 affiliated startups counted by the university include those led by faculty or former students and those built around research conducted at Todai. So far, most of the students starting ventures come from the university’s graduate departments—an indication that Todai undergraduates still mostly prefer more-secure jobs in government or big business.
Tao Cheng was enrolled in a University of Tokyo master’s degree program in 2008 when he started popIn Inc., an online ad company. The Chinese student raised ¥40 million from UTEC to fund his startup and based his office in Todai’s Entrepreneur Plaza, an incubation facility home to more than 20 startups.
“From funding to office space to free legal advice, I don’t think there’s anyone else who has taken fuller advantage of the university’s startup support system than myself,” said Mr. Cheng.
In June, China’s Baidu Inc., operator of the world’s second-largest search engine, bought popIn for between ¥1 billion and ¥2 billion, or between $8 million and $16 million, according to Mr. Cheng, who declined to give the precise amount but suggested a range.
Other ventures with a Todai connection include PeptiDream Inc., a biotechnology company that has drug-discovery partnerships with large U.S. and European drug makers based on technology developed by Todai professor Hiroaki Suga. And Schaft, a robotics company started at the university, made headlines in 2013 when it dominated a robotics competition sponsored by the U.S. Defense Department’s research arm. Google Inc. had snapped up Schaft shortly before the competition for an undisclosed sum.
Despite being ahead of the pack in Japan, Todai is still no match to American universities such as Stanford, which alone boasts thousands of companies started by its alumni and faculty. Google, co-founded byLarry Page and Sergey Brin when they were enrolled in Stanford’s doctoral program, is now valued at roughly $440 billion.
“Plenty of students enter Stanford not planning to become entrepreneurs, but by interacting with so many alumni and ecosystem players, they get interested,” said Kenji Kushida, a researcher at Stanford who leads a project that seeks to help Japan build closer connections to Silicon Valley and learn from it.
Mr. Kushida said even Stanford graduates with little interest in becoming entrepreneurs get pulled into startups years down the road, once they gain skills and interact with fellow alumni. Japan needs to create similar opportunities for interaction, he said.
Dr. Kagami of Todai agreed that not everyone nurtures the startup spirit while in school.
“But there are great role models out there, and 10 remarkable entrepreneurs are enough to make a difference,” he said.
Write to Alexander Martin at alexander.martin@wsj.com
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