Japanese online learning platform Mana.bo raises $3.4M from Benesse and two VC...

Japanese online learning platform Mana.bo raises $3.4M from Benesse and two VC firms

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See the original story in Japanese.

Tokyo-based online learning service startup Mana.bo has raised 330 million yen (approximately $3.4 million) from Japanese education business conglomerate Benesse, Nissay Capital, and Mitsubishi UFJ Capital. This follows their previous funding last year in a seed round from investors including CyberAgent Ventures.

Coinciding with the funding, the company unveiled that it will start a new consumer-focused learning service this fall. The funds will be used to hire more staff and promote the new service.

Several funding rounds have occurred in the online education service sector. In August, online cram school startup online cram school startup Aoi.Co. raised $1.2 million from Jafco, and computer programming camp operator Life is Tech raised $3 million from several investors. In contrast with the declining birth rate in Japan and the news that a major cram school chain will shut down the majority of their schools, emerging educational service companies are showing good growth.

Since its launch in April 2012, Mana.bo has been managing business based on a B2B2C model, where they provide their online tutor service in partnership with client companies in the educational industry. Benesse, which led the funding at this time, and Mana.bo jointly launched in April a service called Real-time Katei Kyoshi (real-time online tutor service). (See their promotional video below)

Mana.bo initially aimed to provide their service under their own brand. However, educational services are typically paid for by parents, who take into consideration the brand name of a service operator. In this regard, Mana.bo made the right choice and has been showing great success by leveraging big brands.

While seeing good growth in the service, Mana.bo succeeded in attracting talented people from the startup community in Tokyo, such as Daisuke Yamashita (previously with Japan’s online recipe site Cookpad, joined Mana.bo as CTO in 2013) and Junji Kondo (previously with Japan’s augmented reality startup Tonchidot, joined the Mana.bo team in July this year).

Mana.bo’s business is stable thanks to partnerships with big companies, but they will become just one of many outsourced companies rather than a startup if remain dependent upon that business model. We can also assume that funding at this time suggests Mana.bo are looking to exit by an acquisition by big companies like Benesse. However, the more massively Mana.bo runs businesses on a partnership basis, the more complicated benefit sharing between Mana.bo and their partnering companies will be because Mana.bo depends on these companies in acquiring students and procuring online tutors.

The company aims to solve this key issue with the new service starting this fall. According to Mana.bo CEO Katsuhito Mitsuhashi, they have more than 500 online tutors registered, chiefly students attending top universities like the University of Tokyo or Keio University, and they can teach students without assistance from the company. In a booth at the Mana.bo office, several tutors are on standby to receive questions from students.

In addition to preparing for Q&As from teachers and students online, the company has been developing a new app for the new service. The new app in a paper prototype has a sophisticated interfacbeyond reduce confusion when they ask a question. It also incorporates social media components. Further details when the app goes live.

The company needs to acquire students for the new service without partnering companies, so they have to gain brand awareness among parents. CEO Katsuhito Mitsuhashi will proceed on this issue while exploring new marketing channels, but he did not divulge much information on this point.

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From the left: Mana.bo CEO Katsuhito Mitsuhashi and engineer Junji Kondo