Japanese startup Tokyo Otaku Mode raises $2.7M



See the original story in Japanese.

Tokyo Otaku Mode, the startup behind the Japanese subculture site of the same name, announced today that it has raised series A funding worth 270 million yen. The round was led by Itochu Technology Ventures, with Mitsubishi UFJ Capital, Sun Eight Investment, GaiaX Global Marketing Ventures (GX), and 500 Startups also participating [1]. Otaku Mode did not disclose the breakdown of the funding.

Since first launching in the form of a Facebook fan page back in 2011, the startup has acquired over 14.7 million likes. They registered a company in Delaware in December of 2012, and subsequently joined Silicon valley accelerator 500 Startups.

In addition to their fan page, they subsequently created their own website OtakuMode.com. Their partnering creators have increased to five times the total from last year.

Evolving into e-commerce


The company started its e-commerce business last September, as one of their primary revenue streams in addition to ad sales. We understand that they intend to use these new fund to further improve their e-commerce platform.

According to the company’s CEO Tomohide Kamei, the gender demographic of their user base is evenly split, with almost 40% of their users coming from the Asian region, with 20% for each of North and South America. Most of of items sold on the platform are shipped to overseas users spread across 60 countries.

Their strategy for marketing their e-commerce business is very aggressive. For example, a limited edition print (shown below) was $1,200, but it sold out immediately. Dragonball art prints autographed by manga author Akira Toriyama is on sale for about $200.

The user retention rate for their e-commerce service is much higher than other e-commerce sites, says Kamei.

A toy shop for the world

I believe Tokyo Otaku Mode has much potential to be a global media presence, capitalizing on Japan’s unique culture and art. But it will likely be difficult for them to be a comprehensive solution like Amazon, which started out with books but expanded to other items. The startup’s strength is very dependent on their chosen niche.

Kamei explained that the market cap in the global entertainment merchandising industry is worth about $29.3 billion. Since the market is dominated by content companies from the US and and around Asia he hopes that his company can sell products using characters from other companies in the future (Disney, for example). He added,

We can’t win alone. We can build our business by partnering with content holders. If we expand our business to selling non-Japanese character items, our website could look like a toy shop selling interesting items from around the world.

Even limited edition prints worth $1,200 were sold out immediately
Even limited edition prints worth $1,200 were sold out immediately

  1. Itochu Technology Ventures, GaiaX Global Marketing Ventures, and 500startups invested in the past rounds.