Japan’s cloud-based accounting startup Freee raises $29 million in series C round

Japan’s cloud-based accounting startup Freee raises $29 million in series C round

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See the original story in Japanese.

Tokyo-based Freee, a cloud-based accounting platform startup under the same name, announced today that it has fundraised 3.5 billion yen ($29 million) from US-based VC firm DCM, Japan’s Recruit Holdings (TSE:6098), Japan Coinvest Limited Partnership in the series C round. With the latest funds, the company has fundraised 5.2 billion yen ($43 million) since its launch in 2012.

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At a news conference this July, Freee CEO Daisuke Sasaki revealed that he aims to make his company a unicon, a startup worth over $1 billion.

Cloud-contained society, a new product concept by Freee, was announced following the introduction of several initiatives by the Japanese government, such as the launch of e-Gov API (application program interface) and the national identification number system, as well as the change of the electronic form storage method for tax documents. These changes may accelerate the adoption of cloud-based systems into many business applications, encouraging many startups to focus on cloud-based services for businesses.

Freee also aims to be a platform that supports small businesses. Using the funds, the company plans to develop services supporting a wider range of back office operations for small businesses. Freee launched a company foundation support service in June, followed by other menus like cloud-based accounting and payroll services. The company will launch a new service supporting the Japanese national identification number system for businesses in October, followed by supporting the change of the electronic form storage method by end of 2015.

Competition in this sector is heating up as many companies are shifting to cloud-based services. Sasaki explained how his company beats the competition:

Freee has the top share in Japan for cloud-based accounting, having accumulated much knowledge. In addition, we are the only company focused on cloud-based services for small businesses, which means our resources are focused on the targeted niche.

Based on all these factors, our designs for easy user operations are common in our all services. Many surrounding services will be integrated into the Freee accounting platform – taking a high share of the industry, which will also benefit our users.

Translated by Masaru Ikeda
Edited by Kurt Hanson