Japanese fish delivery startup making waves, raises $1.5 million

Hachimenroppi CEO Masanari Matsuda
Hachimenroppi CEO Masanari Matsuda

See the original story in Japanese.

Tokyo-based Hachimenroppi (named after the eight faces and six arms seen on many Buddhist statues) is a startup that does something rather unusual. It delivers fish, handling distribution services for restaurants. And apparently that business has some serious potential, as the company announced recently that it has raised 150 million yen (approximately $1.5 million) from VC firm Value Create, PR agency Vector, and logistics company Winroader.

The startup’s founder and CEO Masanari Matsuda has had a unique career since he started working in the banking industry, moving on to a VC firm, and then launching two companies prior to this one. He launched this startup back in September of 2010 when he thought there was great potential in evolving fish distribution.

The company buys fish from markets and brokers across the country and delivers it to Japanese izakaya restaurants or diners, according to their specific needs. The fish products industry in Japan has an annual volume of 3 trillion yen ($30.9 billion), and the startup expects to meet the demands of 300 billion yen ($3.09 billion) by the year of 2020, accounting for a 10% market share.

Every single restraurant has a different need regarding what kind of fish or how many fish are needed day to day. On the other hand, what fish are available very much depends on changing [environmental] conditions. So matching the needs of restaurants with supplies from the market can be compared to doing a huge jigsaw puzzle. We facilitate this by making the most of digital technologies.

From an outsider’s perspective, the fish distribution business is fiercely competitive because of the abundance of Japanese izakaya restaurant chains. But according to Matsuda, this intense competition is happening only in the area inside Tokyo’s Yamanote loopline (the center of Tokyo), and the whole distribution system works based on supply in the rest of the country. He added:

When we get an order from restaurants, we’ll not be able to refuse their orders because there was a poor catch. A direct delivery from ports is good in providing fresh fish to restaurants, but it’s not good at all times because a poor catch directly results in unavailable dishes on their menus. We can understand the needs of restaurants and propose alternative options to them. This is our value.

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Hachimenroppi’s app for restaurant chefs and cooks

In order to do this the startup’s employees periodically visit restaurants/clients to establish better communications with their chefs. Interestingly, no specific personnel is assigned to each client, but any updates about restaurants collected by the employees are shared within their startup using Evernote. This means that any of their employees can visit clients, translating into greater potential for their business scalability.

Matsuda thinks that delivering top quality fish to consumers is their duty. With these new funds raised, they plan to develop a system that proposes fish recipes to chefs or cooks using smart tablets.

Instead of removing middlemen from the distribution process, which typical discount retailers often do, the company attempts to evolve the entire industry using digital solutions. If their service helps consumers eat better quality fish and if it helps fishermen earn more, it should certainly boost the fishing industry as a whole.

Similar to Hachimenroppi, we’ve seen more than a few Japanese startups trying to evolve conventional businesses using digital technologies, including Raksul (printing) and LeNet (laundry). We’ll feature a more comprehensive list of such startups soon, so stay tuned!