Tokyo-based Mercari, the startup behind the mobile flea market app of the same name, announced today it has raised 1.45 billion yen (approximately $14.1 million) from Global Brain, Globis Capital Partners, Itochu Technology Ventures, GMO Venture Partners, and other unnamed investors.
Coinciding with this funding, Fumiaki Koizumi, who had been serving as a part-time director, was appointed as a full-time officer. In addition, Shinichi Takamiya, the chief strategy officer at Globis Capital Partners has joined the board of directors.
Since the service’s launch back in July, the Mercari app has surpassed one million listed items, growing at a pace of 10,000 items every day (as of last December). Their daily submissions recently grew to tens of thousand of items, and total transactions on the platform also reached several million of US dollars. The app has seen 1.5 million downloads to date.
Furthermore, the company is planning to launch a subsidiary in the US to begin its international business operations. Mercari co-founder Ryo Ishizuka, former senior architect at Rock You, will be appointed as a representative for the US company.
The company’s CEO Shintaro Yamada told us a little about who their typical users are, and how those users behave:
Ladies and kids apparel account for the majority of items traded in the app, comprising about 70%. Our typical users are housewives living in remote areas. They sell unnecessary items to earn spending money, and they often buy a new item with the app.
Many expensive items, like consumer electronics for example, are submitted these days, and he expects to make Mercari a more comprehensive flea market platform.
So how are other flea market apps and auction services doing these days in comparison? Yahoo Auction leads this space in Japan, transacting over $500 million a month. Yamada expects his Mercari to eventually account for about 40% of the entire online flea market industry in Japan.
If that’s the case, we can estimate the leading C2C platform in Japan can transact about $200 million a month. Mercari still has a small share but has the potential to beat its competitors. Yamada expects to acquire new users on smartphone rather than going after users that live in other existing buy-and-sell platforms. The company is currently a 40-person team, with about half of those dedicated to user support.
Of course, if the company only does business in Japan, the market ceiling would be hundreds of millions of dollars. Yamada and his team often visit the U.S., and it seems they’ve been preparing international expansion since their launch. They have already started hiring in San Francisco. According to Yamada, the company figures to launch a service from a scratch in the U.S., rather than making use of what they’ve learned and built in Japan.