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Fancy showing fantastic growth, planning launch in Japan soon

Yukari Mitsuhashi 2013.03.14

It was just a little while ago that I heard news that New York-based social commerce service Fancy would soon officially launch in Japan. We recently had a chance to meet Kosaku Yada, the guy who is responsible for making it happen. The ‘boss of Japan’ (the actual title on his business card) told us a little bit about what Fancy has planned for the country in the near future. For those not familiar with it, the social commerce site originally launched all the way back in December of 2010, and has now accumulated over 3 million users. Fancy growth is impressive so far, and just last week the site snatched an all time high of 250,000 new users in a week. Of those 3 million total users, Japan only accounts for a small fraction of them. So why chose Japan as the next market? Culturally, Japanese value design, quality, and attention to details above simply the price of products. The smartphone penetration rate is high, and Japanese users are used to purchasing through their mobile device. Mobile commerce is also a main focus of our business and where more and more of our efforts are headed. So we see…

It was just a little while ago that I heard news that New York-based social commerce service Fancy would soon officially launch in Japan. We recently had a chance to meet Kosaku Yada, the guy who is responsible for making it happen. The ‘boss of Japan’ (the actual title on his business card) told us a little bit about what Fancy has planned for the country in the near future.

For those not familiar with it, the social commerce site originally launched all the way back in December of 2010, and has now accumulated over 3 million users. Fancy growth is impressive so far, and just last week the site snatched an all time high of 250,000 new users in a week.

Of those 3 million total users, Japan only accounts for a small fraction of them. So why chose Japan as the next market?

Culturally, Japanese value design, quality, and attention to details above simply the price of products. The smartphone penetration rate is high, and Japanese users are used to purchasing through their mobile device. Mobile commerce is also a main focus of our business and where more and more of our efforts are headed. So we see a lot of parallels between the Japanese market direction and ours. Although Japanese users are only a small fraction of the current userbase, we think it’s a good match.

When it comes to e-commerce, the Japanese market is filled with domestic players, as well as global giant Amazon, which is almost as common as Rakuten here. Localizing an app is one thing, but localizing an entire commerce experience is another. Fancy plans to overcome the language barrier first and will move on to providing the necessary payment options for Japanese shoppers possibly by partnering with strong local companies.

Fancy is where people come to discover cool things to buy, with 95% of all items on the site available for purchase. But Yada says that there are hopes Fancy might become more than that for Japan, introducing and exporting interesting craftmanship and designs to the rest of the world. Who knows, a small factory in Kyoto with a cool product might find fans around the world if some fan celebrity decides to “Fancy” their item.

Yada explains that Fancy is currently in middle of raising another round of funding with American Express as the lead investor at 26.4 million. The added funds will be used to enhance logistics and customer service as well as arrange the launch in Japan. Fancy also recently announced Google Plus integration with its site allowing users to join more easily.

There were no specifics mentioned about a timeframe for the Japan launch, but as a fan of the site, I can only hope that Japanese users will be able to experience fancy shopping sooner rather than later.

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Japanese startup acquisitions: An interactive timeline

Yukari Mitsuhashi 2013.03.14

As I mentioned in a recent article about Yahoo Japan’s acquisition of Dreampass, the startup eco-system is gradually taking shape here in Japan. Incubators play a big role in the eco-system and off the top of my head I can think of maybe ten incubators. Many provide a Y-combinator model three month program with five to ten startups in each class. Most acquisitions have happened in the past year or two, so it is still far too soon to predict the fate of such startups. However, we have witnessed some encouraging exits in the last couple of years, so we thought we’d present an overview. Note that it’s not comprehensive, but it is a good general overview. Check out our interactive timeline of acquisitions above (feel free to share with the embed code below), or read on for more details below! Cirius Technologies (August 2010) ¶ Yahoo Japan (TYO:4689) acquired geo-location enabled mobile advertisement technology company Cirius Technologies for an undisclosed sum. At the time of, it was rumored to be an acqui-hire for Yahoo so that it could obtain patents for the ad-technology in hopes of optimize its local mobile advertisement products. Atlantis (January 2011) ¶ Gaming giant GREE…

As I mentioned in a recent article about Yahoo Japan’s acquisition of Dreampass, the startup eco-system is gradually taking shape here in Japan. Incubators play a big role in the eco-system and off the top of my head I can think of maybe ten incubators. Many provide a Y-combinator model three month program with five to ten startups in each class. Most acquisitions have happened in the past year or two, so it is still far too soon to predict the fate of such startups. However, we have witnessed some encouraging exits in the last couple of years, so we thought we’d present an overview. Note that it’s not comprehensive, but it is a good general overview. Check out our interactive timeline of acquisitions above (feel free to share with the embed code below), or read on for more details below!

Cirius Technologies (August 2010) ¶

Yahoo Japan (TYO:4689) acquired geo-location enabled mobile advertisement technology company Cirius Technologies for an undisclosed sum. At the time of, it was rumored to be an acqui-hire for Yahoo so that it could obtain patents for the ad-technology in hopes of optimize its local mobile advertisement products.

Atlantis (January 2011) ¶

Gaming giant GREE picked up ad-exchange platform Atlantis with an eye to winning an advantage over its competitors. Just a month after the acquisition, Gree began it’s own independent ad program. The acquisition price was rumored to be somewhere around two billion yen.

Nobot (July 2011) ¶

Tokyo-based smartphone ad optimization and exchange platform Nobot was acquired by KDDI’s advertising unit Mediba for 1.5 billion yen (about $19.2 million). With this acquisition, KDDI became one of the largest local ad platforms, pitting it directly against Google’s AdMob.

Naked Technology (September 2011) ¶

Mixi, one of the biggest and oldest social networks in Japan, acquired Naked Technology, a smartphone development company known for its talented engineers in hopes of enhancing its smartphone app development. The terms of the deal were not disclosed.

Conit (November 2011) ¶

A few months later Mixi also picked up Conit, a startup that was founded in 2008 and focused on smartphone app development. It operated an in-app purchase platform for iOS and Android called Samurai Purchase.

Mars Ltd. (November 2011) ¶

Gree acquired Tokyo-base startup Mars Ltd, a company known for its signature pet game ‘Megu.’

Pikkle (April 2012) ¶

Online game and smartphone development studio KLab acquired social games Pikkle company for 175 million yen. This was an acqui-hire for the development team, also bringing in CEO David Collier, the current CTO at KLab America.

Decopic (September 2012) ¶

Community Factory, the company behind this successful photo sharing app for girls, was acquired by Yahoo Japan for an estimated one billion yen. The six year-old startup (at the time) was the very first startup to be funded by a Mixi venture fund. Owning 40% of the total stocks, Mixi for the first time recorded a sizable chunk of income amounting to about 310.2 million yen(about $3,246,000).

Social Lunch (December 2012) ¶

Social game company Donuts acquired lunch partner matching app Social Lunch for an undisclosed sum. Having operated for just a year and four months at the time of buyout, the app had 60,000 users. Social Lunch was a graduate of the KDDI Innovation Fund and the three members of the team joined Donuts to continue the operation of Social Lunch.

Kamado (December 2012) ¶

Kamado was another Mixi acquisition. The company’s well-known CEO Yuichi Kawasaki was the former vice president of Japanese bookmarking site Hatena. Kamado runs a few web services including a social item exchanging website Livlis and a fashion photo curation site called Clipie.

Enter Crews (January 2013) ¶

Mobile entertainment platform Mobcast went public in June of 2012 with over 2.7 million users (as of October 2012). It acquired online game development company Enter Crews (with 300,000 users in Japan) for roughly 600 million yen. Enter Crews was founded in September of 2009 and has opened offices in Korea and Indonesia as well. It’s a logical move by Mobcast who is eager to accelerate its expansion to other parts of Asia.

Dreampass (March 2013) ¶

The most recent acquisition was made by Yahoo Japan for on-demand cinema service Dreampass, for an undisclosed amount. You can read more about the deal here.

This is not a complete list of startup exit stories from Japan, but you can get an idea that the money is moving around mobile ads and social gaming. Although the competition for talent (especially developers) is not as intense as Silicon Valley, social gaming companies are facing a talent acquisition war. I’m sure that these examples will only encourage and motivate creative young Japanese with their minds set on changing the world.

Feel free to share our graphic using the embed code below:

</p> <div class="video-container"> <div class="video"><iframe src='http://embed.verite.co/timeline/?source=0Ankqe-fbHOHIdC1zb1RZNV9jQ3MwVjFvNTI3U1BMaGc&font=Bevan-PotanoSans&maptype=toner&lang=en&height=650' width='100%' height='650' frameborder='0'></iframe></div> </div> <p>

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Japan’s Open Network Lab now taking applications for its incubation program

Masaru Ikeda 2013.03.14

See also this story in Japanese. Open Network Lab (aka OnLab), a Tokyo-based tech incubator backed by Digital Garage and NetPrice.com, has today started receiving applications for the 7th batch of the seed accelerator incubation program. The amount of funds for each qualified startup is 2 million yen (over $20,000), which is double what it was in the past. A special training course called the ‘Onlab Hacker Program‘ allows participating engineers to work with the incubator’s portfolio startups, thus forming an ecosystem where ‘succeeding’ startups can help new entries at the incubator. It’s often said that in order to launch a startup, we need to have three kinds of people: hustlers (management), hipsters (designers/creatives), and hackers (engineers). The incubator now serves all three of these, with doubling the funding for hustlers to work with, UI and UX mentoring from Adaptive Path founder Janice Fraser and AQ CEO Chris Palmieri, and now, they’ve established this program for hackers as well. Incubators usually need to figure out a way to differentiate themselves from others, and OnLab has made a good effort to do that here. Similarly, KDDI Mugen Labo, the tech incubator by Japan’s second largest telco, has set up a special application category…

See also this story in Japanese.

Open Network Lab (aka OnLab), a Tokyo-based tech incubator backed by Digital Garage and NetPrice.com, has today started receiving applications for the 7th batch of the seed accelerator incubation program. The amount of funds for each qualified startup is 2 million yen (over $20,000), which is double what it was in the past. A special training course called the ‘Onlab Hacker Program‘ allows participating engineers to work with the incubator’s portfolio startups, thus forming an ecosystem where ‘succeeding’ startups can help new entries at the incubator.

It’s often said that in order to launch a startup, we need to have three kinds of people: hustlers (management), hipsters (designers/creatives), and hackers (engineers). The incubator now serves all three of these, with doubling the funding for hustlers to work with, UI and UX mentoring from Adaptive Path founder Janice Fraser and AQ CEO Chris Palmieri, and now, they’ve established this program for hackers as well.

Incubators usually need to figure out a way to differentiate themselves from others, and OnLab has made a good effort to do that here. Similarly, KDDI Mugen Labo, the tech incubator by Japan’s second largest telco, has set up a special application category for HTML5-engineering startups, and OnLab and Movida Japan have begun seeking high potential startups in cities beyond Tokyo. These efforts are good to see, representing a range of new entrepreneurship opportunities for creative minds out there.

Applications for OnLab’s seventh batch open today (March 14th), and the deadline is set for May 31st. If you’d like to apply, you can do so here. Good luck!

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Catching up with the CoolIris team in Tokyo

Rick Martin 2013.03.13

If you spend a lot of time on popular social networks, it can be tough to wrap your head around exactly what CoolIris is. The Palo Alto company has produced a number of photo solutions over the years, most recently its CoolIris app which aspires to bring all your photos together in one place. It’s not photo sharing in the sense that we’ve become accustomed to, but rather a meta viewing/sharing layer on top of the photo services we already use. I caught up with representatives of the company, including CEO Soujanya Bhumkar, at our Tokyo office this week to learn more about what they are up to these days. Currently the company boasts Japan as its second largest install base, next to the US, so its not surprising that they would pay a visit here every once in a while [1]. When we spoke with Soujanya, he highlighted not only the app’s capabilities of bringing together your photos from places like Facebook, Flickr, Instagram, and your camera roll, but also the important function of being able to share photos selectively. In a time when people are turning to closed social networks like Path [2], this adds value on top…

L to R: VP Business Development Sebasian Blum, Sr Software Engineer Venkat Krishnaraj, CEO Soujanya Bhumkar

If you spend a lot of time on popular social networks, it can be tough to wrap your head around exactly what CoolIris is. The Palo Alto company has produced a number of photo solutions over the years, most recently its CoolIris app which aspires to bring all your photos together in one place. It’s not photo sharing in the sense that we’ve become accustomed to, but rather a meta viewing/sharing layer on top of the photo services we already use. I caught up with representatives of the company, including CEO Soujanya Bhumkar, at our Tokyo office this week to learn more about what they are up to these days. Currently the company boasts Japan as its second largest install base, next to the US, so its not surprising that they would pay a visit here every once in a while [1].

When we spoke with Soujanya, he highlighted not only the app’s capabilities of bringing together your photos from places like Facebook, Flickr, Instagram, and your camera roll, but also the important function of being able to share photos selectively. In a time when people are turning to closed social networks like Path [2], this adds value on top of the slick 3D photo wall view that CoolIris already is best known for (pictured right).

So if you wish to send pictures from your various sources to someone by email, you can do so without the need for attachments as the collection is sent to the recipient (or a group of recipients) via a browser link. Interestingly, if more photos are added, you’ll see it in real time, and you can also see a real time chat discussion in the browser too.

On the business side of things, it’s interesting to see CoolIris’s business model develop a B2B element, with prominent regional partners that includes Renren in China and Yandex in Russia. Many of its partners promote CoolIris heavily, allowing it to quickly expand its user base around the world.

Next in Line?

Naturally, we were curious if they might be eyeing some specific partners here in Japan. And while they couldn’t specify any company in particular, we think NHN Japan’s Line appears to be a natural fit (especially given the popularity of Line Camera). Soujanya tells me that Korea is the next stop on their trip, and I wouldn’t be surprised to see KakaoTalk as a stop on their tour too.

As for the future of the CoolIris app, the team tells us that video is something that could be on the horizon, as well as possible integrations with Vine. They are also considering in-app purchases for some premium features and services.

Soujanya asserts that ‘Pixels are the new decibels’ and that they hope to empower their users to be able to show off their best pictures with family and friends without worrying about complex privacy settings.

Let’s stay tuned and see where they go from here!

Asia as a whole accounts for 30% of its user base. And I understand that China is the number two country in terms of growth rate, which is a good indication that adding Renren integration was a good idea. ↩
I’m not a Path user, but I do use Notabli for baby pictures. ↩

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Online support software provider Zendesk makes its presence in Japan official

Rick Martin 2013.03.13

See also this story in Japanese. Online customer support platform Zendesk has officially established a presence here in Japan, celebrating the launch of its KK in Tokyo yesterday evening. I had a chance to catch up with the company’s CEO Mikkel Svane the day before the event, and asked him a little about how Zendesk plans to approach the Japanese market. So far the company has about 100 customers here in Japan (having made its services available in Japanese last year) out of a total of 3,000 in the Asia Pacific. The majority of customers in the region are from Australia and New Zealand, because the company’s initial traction has been in English speaking markets, but recently opportunities are presenting themselves in other countries too, as Mikkel explains: There are [new] markets that we see recently with some traction, and Japan is one of these. It’s a big, homogenous, scalable market. We have been fortunate to work with some early partners with whom we have a mutual respect. […] I think it’s important to bridge the cultures and that’s very much in the DNA of Zendesk — we have a crazy mix of nationalities. We will be patient, we have…

See also this story in Japanese.

Online customer support platform Zendesk has officially established a presence here in Japan, celebrating the launch of its KK in Tokyo yesterday evening. I had a chance to catch up with the company’s CEO Mikkel Svane the day before the event, and asked him a little about how Zendesk plans to approach the Japanese market.

So far the company has about 100 customers here in Japan (having made its services available in Japanese last year) out of a total of 3,000 in the Asia Pacific. The majority of customers in the region are from Australia and New Zealand, because the company’s initial traction has been in English speaking markets, but recently opportunities are presenting themselves in other countries too, as Mikkel explains:

There are [new] markets that we see recently with some traction, and Japan is one of these. It’s a big, homogenous, scalable market. We have been fortunate to work with some early partners with whom we have a mutual respect. […] I think it’s important to bridge the cultures and that’s very much in the DNA of Zendesk — we have a crazy mix of nationalities. We will be patient, we have a lot to learn — but we are committed long term.

He admits that for the Zendesk team coming to Japan, there’s certainly more than a little mystery surrounding the market here. Like many Western companies aspiring to get into Asia markets, finding the right local staff and local partners will be key:

I think we’ll rely a lot on the people that we hire to see what version of the Zendesk product and culture will work here. We will work with early adopter companies and gain a foothold there, and that is how we plan to embrace the Japanese market. I feel very confident about that.

Educating and informing

As many of you may know, Zendesk made headlines in late February when a hacker broke into its system and downloaded email addresses. And while the company was pretty transparent about what transpired, I was curious whether or not this affected their pursuit of new customers, especially here in Japan. Mikkel explains that for customers who are in the buying process, there are some who would like to know more about what happened, and some existing customers have questions as well. They have been explaining how that vulnerability was exploited, and relating the measures that they are taking to ensure it doesn’t happen again. I’m told that Zendesk signed a big client just last week, certainly a good sign that companies still have faith in them.

In order to help further educate potential customers about their services, Zendesk has been holding the same sort of ‘bootcamps’ which it has held in other regions. Here in Japan, their first bootcamps were conducted with translators, but the most recent one in February was conducted entirely in Japanese in cooperation with a local partner.

Interestingly, Mikkel and his team observe that working with smaller businesses here in Japan is pretty much the same as working with small businesses elsewhere. The company has worked with startup incubators around Asia, and they hope to do the same in Japan as well. They already work with Open Network Lab, and I expect there will be more to come later as well.

Domino’s Hatsune Miku app boosting pizza sales in Japan. We gave it a test run. [Video]

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Fancy showing fantastic growth, planning launch in Japan soon