Japanese crowdsourcing marketplace Lancers raises $2.9 million

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See the original story in Japanese.

Japanese crowsourcing marketplace Lancers announced today that it has raised 300 million yen ($2.9 million) from Globis Capital Partners (GCP) and GMO Venture Partners (GMO-VP). Coinciding with this funding, GCP partner Shinichi Takamiya has joined Lancers’ the board of directors. Readers may recall that we previously wrote about Lancers back in April.

Since the service launched in 2008, it has acquired about 140,000 members (crowdsourced workers) and has transactioned about 7 billion yen ($68.3 million). The amount of the transactions reached 3.5 billion yen ($34.2 million) in the previous fiscal year, which is same amount as its total dealings up to that point (i.e. from 2008 and 2011).

The company recently moved its headquarters from Shibuya to Kamakura, just outside of Tokyo.

Why now?

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Lancers’ CEO Yosuke Akiyoshi

Lancers’ CEO Yosuke Akiyoshi explained why they raised funds at this particular point:

Our business is growing well, and we’re not suffering from cash flow issues. However, we made up our minds to fundraise so we can massively speed up our business at this time. […] Now we need to focus on standardizing the format of crowdsourcing projects.

By enhancing its database of crowdsourcing workers, the startup is now exploring partnerships with other category-focused crowdsourcing services such as ADFlow (crowdsourcing banner ad design) or MugenUp (crowdsouring illustration or cartoon-drawing work).

Cultivating local workers in local markets

Regarding expanding their business in local markets, he explains:

In order to make our business grow further, I believe it’s also important to help freelancers grow. They aren’t our employees but we need to invest in cultivating these workforces. If you compare outsourcing tasks to overseas markets with doing so in local markets, there will be no significant gap in terms of cost. But there’s a big gap in the volume of the tasks between the two. We’d like to gather more users and partners by promoting the new freelance working style as well as our own platform.

The startup is planning to launch a new system in the future, where they will conduct interviews to find potential leaders among freelancers at many locations across the country. They will be approved as ‘qualified freelancers’ and lead projects with other workers located at various locations.

People typically see crowdsourcing as a sort of quick and dirty solution. To overcome this stigma, Akiyoshi plans to increase the amount of quality deals on the marketplace.

We actually get more offers from corporate users, [although] we’re haven’t intensified our sales efforts. Once a company uses our service, we’ve seen that its subsidiaries or group companies follow suit.

The company also plans to provide further support to workers, with health insurance or welfare services, and from a freelancer’s point of view that certainly helps make this sort of work become an attractive option.