Japan’s Lancers raises $9M from HR giant and bank, offers loans to...

Japan’s Lancers raises $9M from HR giant and bank, offers loans to freelance workers

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Yosuke Akiyoshi, CEO of Lancers

See the original story in Japanese.

Tokyo-based Lancers, the Japanese startup providing a major crowdsourcing platform under the same name, announced last month that it had raised 1 billion yen (about $9 million) from Persol Holdings (TSE:2181) and Shinsei Bank (TSE:8303). Concluding business partnership contracts with both companies concurrently, Lancers will commence its new financing business targeting freelance workers.

According to Lancers, the current number of freelancers in Japan is 11.22 million comprising 17% of the entire working population, showing a 5% increase from last year. It is said that more and more Japanese workers are coming to choose a ‘new work style’ which is neither full-time nor contract work. On the other hand, Persol Group, one of the investors this time, has developed various businesses that enhance job mobility of the Japanese working population, by using temporary staff company Tempstaff (TSE:2476) or staffing agency Persol Career (TSE:4757, formerly known as Intelligence) that it owns.

While the two companies had been affiliated through investment via Persol Career, by adding Shinsei Bank into this framework, they aim to develop and provide a new loan service to individual workers who need equipment investment or education / training upon starting new business.

At the press conference held last April, Lancers announced that its sales in 2016 exceeded 2.1 billion yen and then revealed a new concept of Open Talent Platform as its business strategy out of an otherwise conventional online work matching platform. It presented several action plans for gearing up of its service operation as part of the concept, such as start of individual skill matching platform Pook or the spin-off of Quant for corporate customers.

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The loan business to individuals announced this time is an extension of the concept, and is expected to be a system enabling individual workers to receive credit examination or third-party evaluation as with full-time workers. Specifically, they plan to visualize individual workers’ skill or work style as ‘Talent Score’ based on evaluation data accumulated by Persol Group or Lancers, and input it into business activities leveraging Shinsei Bank’s financial know-how.

Yohsuke Akiyoshi, CEO of Lancers, explained that the firm will jointly develop Talent Score as an evaluation criterion for the establishment of ‘Lancer Economies’:

Our cumulative fundraised amount is 2.3 billion yen (about $21 million) including this round. I see the two companies as partners to establish Talent Score together in order to increase freelancers’ working option under the framework of Open Talent Platform.

With Persol Holdings, we will jointly develop an evaluation system of freelancer’s work style and skill. Even in Lancers or Persol, full-time workers taking up freelance works as side jobs have been appearing.

Akiyoshi said the kind of workers that are expected to benefit most through this business partnership is those who hold full-time jobs and freelance work concurrently, called ‘parallel worker’:

Conventionally, work contents or performance evaluation were completely separated between the main job and the extra job.

However, in the economic area we are going to create, users can receive higher salary in their main job reflecting feedback of the subsidiary job performance at Lancers, or vice versa.

With the other partner Shinsei Bank, Lancers plans to carry out activities related to credit examination based on the score, according to Akiyoshi:

We also develop Talent Score with Shinsei Bank. Although Lancers has own unique data, the bank has a strength in individual credit data in terms of quality and quantity.

By cooperating with the institution, we will upgrade Talent Score and invest in Lancers users who are scored at a certain level, in order to change the current situation where it is harder for freelancers to borrow money than full-time workers. Imagine how we can improve their work style together as well as their life generally.

With respect to the concept of scoring individuals, Japan’s Crowd Works had also announced a similar lending service called Crowd Cash. The two players seem to lead the construction of infrastructure surrounding the Japanese new work style now in formation.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy