Japanese child education app developer raises $3.5M in series B funding


See the original story in Japanese.

Japanese startup Smart Education, best known as a developer of educational smartphone apps for kids, announced today that it has raised 75.32 million yen (approximately $748,000) from Shinsei Corporate Investment, the investment arm of Japan’s Shinsei Bank.

Prior to this funding, the startup raised 200 million yen (about $2 million) from Mitsubishi UFJ Capital and Infinity Venture Partners back in December of 2012, and 75 million yen ($750,000) from Fuji Startup Ventures[1] and CyberAgent Ventures back in April. Thus far, the consolidated amount in its seed B funding is now a total of 350 million yen ($3.5 million).

Kindergarten students using the Smart Education apps.
The startup is testing the apps at many kindergartens using 25 tablet devices.

The combination of smart devices and kids education is attracting lots of expectations among investors recently. Smart Education itself has developed nine such apps, which have racked up more than 3.7 million downloads and 800,000 monthly active users. The company points out that almost 50% of all mothers who own smart devices in Japan use these apps.

Smart Education’s growth: app downloads (gray), monthly active users (red), and revenue (green).

The company’s monetization model is based on selling picture-book or music content via in-app purchasing. For Android users, you can choose a subscription-based membership which charges on a monthly basis. They have already started overseas business expansion, and the startup’s managing director Yusuke Kusakabe explains their localization efforts in Korea is showing good numbers. As mentioned I recently mentioned, there are few competitors in this space, when you compare it to other app categories.

The startup’s directors include members who previously worked at CA Mobile, the mobile-focused subsidiary of CyberAgent. With this funding, the startup will accelerate its overseas expansions and bring in some new employees to help with that effort.

In addition to developing smart device apps, they are developing something like a platform where knowledge regarding kids education can be shared among users.

  1. Fuji Startup Ventures is the investment arm of Japan’s largest private TV network Fuji Television.  ↩