Japan’s Nikkei reported earlier this morning that Tokyo-based VC firm Incubate Fund has formed a new fund valued at 11 billion yen (about $91.2 million), focused on investing in IoT (Internet of Things) startups.
While Incubate Fund had been typically an average of several hundreds of thousands US dollars per startup, the new fund is aimed to invest a relatively large amount ranging from $2.5 million to $4 million. Incubate Fund unveiled that it has invested in US-based smart driving assistant developer Drivemode from this fund.
It is often said that IoT businesses typically require more engineering expertise and experience from many industries, so Incubate Fund expects to help IoT startups hire talented people through supply of funds.
Tencent Holding is a stock holding company of a Chinese internet giant. Sega Sammy Holdings is a stock holding company of Japanese major game and pachinko companies. Miseletoe is an investment fund by Japanese investor Taizo Son. TBS Holdings is a stock holding company of Japan’s major private TV network Tokyo Broadcasting System. ↩
Japan’s Nikkei reported today that Japan’s third largest credit card issuing company Credit Saison (TSE:8253) will invest in San Francisco-based Coin, the Y Combinator-backed startup that has been developing a technology rolling up to eight conventional magnetic stripe credit cards into a single digital card. Details of the investment has not been disclosed but it is understood Coin will raise several million dollars from Credit Saison. This will be the first investment for a Japanese credit card company to invest in startup in the US. The article says that Coin is looking to expand to Japan in one to two years and aims to expand to other Asian countries with support from the credit card company. Credit Saison has invested in several Japanese startups developing fintech services, such as mobile payments processing company Coiney, consumer rewards startup Kanmu, and personal accounting startup Money Forward.
Japan’s Nikkei reported today that Japan’s third largest credit card issuing company Credit Saison (TSE:8253) will invest in San Francisco-based Coin, the Y Combinator-backed startup that has been developing a technology rolling up to eight conventional magnetic stripe credit cards into a single digital card. Details of the investment has not been disclosed but it is understood Coin will raise several million dollars from Credit Saison. This will be the first investment for a Japanese credit card company to invest in startup in the US.
The article says that Coin is looking to expand to Japan in one to two years and aims to expand to other Asian countries with support from the credit card company.
Credit Saison has invested in several Japanese startups developing fintech services, such as mobile payments processing company Coiney, consumer rewards startup Kanmu, and personal accounting startup Money Forward.
See the original story in Japanese. In my view the boom of peer-to-peer social lending services has passed its peak in Japan. The reason is that the recent step down of the management at a pioneering company in this sector as well as transitioning their business model much closer to crowdfunding rather than social lending. In the US, major peer-to-peer lending service provider Lending Club IPOed on the New York Stock Exchange in December. I visited their office at the Plug & Play Tech Center in Sunnyvale, California, and met the founders when they launched in 2006. It amazed me that they successfully IPOed and acquired a market cap equal to that of a Japanese regional bank. What caused such a big gap in this space in the market environment between Japan and the US? Does the Japanese social lending industry have a bright future? An interesting Japanese startup called Crowdcredit runs a social lending platform bringing capital from Japan to Latin American. I recently spoke to Tomoyuki Sugiyama, co-founder and CEO of Crowdcredit. Money demand grows, banks go conservative As the world’s population grows, so does the demand for money. Lending money to those in need is a duty…
In my view the boom of peer-to-peer social lending services has passed its peak in Japan. The reason is that the recent step down of the management at a pioneering company in this sector as well as transitioning their business model much closer to crowdfunding rather than social lending.
In the US, major peer-to-peer lending service provider Lending Club IPOed on the New York Stock Exchange in December. I visited their office at the Plug & Play Tech Center in Sunnyvale, California, and met the founders when they launched in 2006. It amazed me that they successfully IPOed and acquired a market cap equal to that of a Japanese regional bank.
What caused such a big gap in this space in the market environment between Japan and the US? Does the Japanese social lending industry have a bright future? An interesting Japanese startup called Crowdcredit runs a social lending platform bringing capital from Japan to Latin American. I recently spoke to Tomoyuki Sugiyama, co-founder and CEO of Crowdcredit.
Money demand grows, banks go conservative
As the world’s population grows, so does the demand for money. Lending money to those in need is a duty of financial services, but banks are unlikely to lend to anyone not only in Japan but also in the rest of the world. This is because of the 2010 Basel III, the global regulatory standard on bank capital adequacy. Many banks in Japan have merged and acquired each other in order to gain capital adequacy ratio, especially in the last several years.
However, in the global banking industry, there are surprisingly a number of banks with a financial solidity in developing countries. Sugiyama explained:
Tomoyuki Sugiyama
There are many conservative banks in developing countries, and they have financial solidity. However, even for middle-income people, which are considered to carry less loan risk, 30% of them lack access to financial services.
Despite the fact that there is huge money demand, banks collect and keep money from people but cannot lend money to them. Having an eye on this huge gap between demand and supply, many peer-to-peer social lending startups have popped up and joined the market.
A series of funds have been continuing in this sector, where UK-based Lending Works fundraised $3.5 million before its launch, and Rocket Internet-backed Lendico snagged $120 million in seven months following its launch.
Conventional banks can offer money savings but cannot do loans. That is why banks are transitioning themselves for the first time in 150 years, Sugiyama says.
Why global?
Many peer-to-peer social lending services born in the 2000s have procured and supplied money in the same market. Examples include Prosper and Lending Club in the US, Zopa in the UK, and Maneo in Japan. However, wealth is unevenly distributed between geographical areas as illustrated in the North-South divide. Hence, the market with money “remaining” is not always the one requiring this money the most. In light of facilitated fund transfers thanks to Internet penetration, it is now natural to go beyond borders when investing money in markets with more demand for such funding.
Sugiyama explained that every market can be categorized to the following three types according to its characteristics.
Procurement gap type…Markets where demand of funds is much larger than supply. (e.g. UK, Spain, Australia, Chile etc.)
Lending gap type…Markets where supply of funds is much larger than demand. (e.g. Japan, Germany etc.)
Developing countries type…While supply and demand of funds are seemingly balanced, the fact is that financial services are still immature there and demand for funds has not yet been apparent in these markets. If cultivated, demand will exceed supply. (e.g. most developing countries).
Among these three types, if any market of the procurement gap type and the lending gap type can be connected, this will work complementarily for both markets and result in an efficient investment. Based on this concept, many campaigns on Crowdcredit deal with funds in Japan to be loaned out to the Latin American market.
However, in view of the economic growth rate by region, we can assume that lending to the Southeast Asian market may create better results. Sugiyama shares his insight:
In Asia, there are problems in financial literacy and administrative transparency of local monetary authorities, which prevents the collection of accurate and precise information.
In view of risk management, he said that peer-to-peer social lending to the Asian market is premature.
Meanwhile, as the social lending industry is more organized, service providers are being more fragmented into two types: funding side (lender management) and deal sourcing side (borrower management). In Crowdcredit’s case, while they are focused on managing lenders and funding, they outsource deal-sourcing management to different “originators” in every market.
Crowdcredit has partnered with originators from around the world collecting projects requiring funds, planning to expand to dealing with projects from Europe and Oceania beyond the Latin American market.
Sugiyama elaborated:
We have traveled around the world, and partnered with almost all of the originators in Europe and Latin America. They also think our approach is interesting because helping them fundraise from the Japanese market creates diversifying funding sources for them.
Within the reach of everyone
Since its launch in June, Crowdcredit has only been serving institutional investors because of a limited operating license from the Japanese monetary authority. But it shifted to a full-service license in December, which has allowed them to serve individual lenders and investors with peer-to-peer social lending projects starting at 100,000 yen ($840). The Japanese government is expected in April to approve loan-type crowdfunding (peer-to-peer social lending) as to be dealt using individual saving accounts (ISA), so profits from social lending will not be subject to taxation under certain conditions.
Sugiyama shared his business plan:
Now that global investment banks and financial institutions have withdrawn from the Japanese market, we are the last generation who has expertise of what they have brought, such as margin trading or arbitrage. In the future, we want to fundraise from credit unions and established companies, and create a global marketplace for peer-to-peer social lending.
The Japanese startup economy is saturated with funds supplied, and risk money is looking for a place to go. In the conservative financial services industry, the market will push such a trailblazing team toward success unless the monetary authority conducts an unnecessary intervention.
Crowdcredit fundraised from Femto Startup just after its launch in 2013, and subsequently secured additional funding round from Monex Ventures, GCI Capital, and Femto Startup in July. Details of these investments have not been disclosed.
See the original story in Japanese. If you recognize the name of ZenClerk, you have a good memory. Born out of the sixth incubation batch of Japanese incubator Open Network Lab in spring of 2013, the team has been developing the service in stealth mode, finally unveiling it last week. Along with the public unveiling of this new revenue optimization platform for e-commerce sites, its operator Tokyo-based DoBoken announced that it had secured seed funding from four notable Japanese angel investors: Shogo Kawada (co-founder of Japanese internet giant DeNA (TSE:2432)), Masanori Sugiyama (CEO of Japanese social game developer Enish (TSE:3667)), Kosuke Matsumoto (managing director of Enish), and Tomohito Ebine (Chairman of Japanese digital ad agency Opt (TSE:2389)). According to DoBoken co-founders Koichiro Onda and Hajime Kuwayama, their company has already turned profitable, so the funding aims to leverage the knowledge of these investors rather than filling financial needs. DoBoken had been initially working on a tool that allows customer representatives to chat with potential customers online, like Singapore-based Zopim which was acquired by Zendesk this year. However, chatting systems require e-commerce owners to allocate some staff specifically for dealing with customers, so the DoBoken team came to believe that these systems cannot always provide user experience suitable to what many potential customers expect. Grounded upon the renewed recognition which shifted their focus to developing a revenue optimization…
From the left: DoBoken co-CEO Koichiro Onda, co-CEO Hajime Kuwayama
If you recognize the name of ZenClerk, you have a good memory. Born out of the sixth incubation batch of Japanese incubator Open Network Lab in spring of 2013, the team has been developing the service in stealth mode, finally unveiling it last week.
Along with the public unveiling of this new revenue optimization platform for e-commerce sites, its operator Tokyo-based DoBoken announced that it had secured seed funding from four notable Japanese angel investors: Shogo Kawada (co-founder of Japanese internet giant DeNA (TSE:2432)), Masanori Sugiyama (CEO of Japanese social game developer Enish (TSE:3667)), Kosuke Matsumoto (managing director of Enish), and Tomohito Ebine (Chairman of Japanese digital ad agency Opt (TSE:2389)).
According to DoBoken co-founders Koichiro Onda and Hajime Kuwayama, their company has already turned profitable, so the funding aims to leverage the knowledge of these investors rather than filling financial needs.
DoBoken had been initially working on a tool that allows customer representatives to chat with potential customers online, like Singapore-based Zopim which was acquired by Zendesk this year. However, chatting systems require e-commerce owners to allocate some staff specifically for dealing with customers, so the DoBoken team came to believe that these systems cannot always provide user experience suitable to what many potential customers expect. Grounded upon the renewed recognition which shifted their focus to developing a revenue optimization platform for e-commerce sites, they looked to leverage a discount coupon to stimulate buying motivation of online shoppers.
For e-commerce sites, one can analyze behaviors of users from smartphones and PCs by adding one-line Java Script code into one’s website. Based on machine learning and data mining technologies, ZenClerk presents users with a discount coupon at the most appropriate timing and provides the potential customers with the extra encouragement to continue on to the purchase step.
Onda elaborated how the platform is differentiated from similar existing solutions:
Ad networks or ad technology solutions help e-commerce sites catch up with potential customers. But there had been no way to improve the user conversion in the process from that point to the purchasing step. Meanwhile, e-commerce sites had been struggling to find an efficient way to use a discount coupon for better results.
While ad networks and ad technology platforms are focused on presenting coupons that encourage potential customers to buy, we are focused on when to present the coupons to them.
If a check as to how online shoppers behave on one’s e-commerce site could be implemented, one could probably discern when the shoppers have made up their mind about what to buy but may still feel hesitant. ZenClerk refers to that indication ‘Moment’, the exact right timing for presenting users with a coupon so that the sales conversion on e-commerce sites has risen exponentially.
ZenClerk’s concept about so-called ‘Moment’
Interestingly, ZenClerk doesn’t present discount coupons to all users. By creating groups of users intentionally receiving a coupon and those receiving no coupon, the platform can conduct an A/B performance test in the two cases. Based on that, ZenClerk can recursively improve the algorithm in detecting the ‘Moment’ timing, and e-commerce site owners can confirm how the sales are improved using ZenClerk via a web-based dashboard interface by comparing the two groups. E-commerce sites will be charged on a performance basis, founded on the sales improvement percentage resulting from optimization platform use.
ZenClerk has been adopted into major e-commerce sites in Japan, such as Dinos. The total amount of monthly revenue from e-commerce sites using the platform has already exceeded 15 billion yen (about $125.2 million).
Collaborative filtering recommendation algorithms have been well known for improving revenue for e-commerce sites. However, it had not always produced results because users were presented with more choices than they expected. ZenClerk enables e-commerce sites to offer promotions automatically, similar to what sales representatives do at real retailers.
Onda explained:
Our solution will not only offer major opportunities in the fashion e-commerce industry but also on any e-commerce sites where users choose items to buy upon preference. For example, the plane ticket may be selected according to price or airline. But regarding where to stay on a trip with your family members or girlfriend, there may be preferences.”KANA? That provides an opportunity for us in terms of helping ticketing sites improve their revenue.
This story brings to mind the Taiwanese startup QSearch which recently won the top prize at Asia Beat 2014, a startup conference held in Taiwan this month. QSearch has succeeded in increasing the conversion performance of Facebook display ads 16 times by targeting ad viewers in utilizing user behaviors rather than user demographics, such as acting with security in mind rather than being in line with age bracket tendencies, for example inclinations to be daring among younger users.
As for a quicker approach to gaining a sales performance, ZenClerk goes a step further than QSearch so there will be huge opportunities for them not only in Japan but also in the rest of the world market.
See the original story in Japanese. Silicon Valley-based Miselu, a startup developing “connected” musical instruments, unveiled a wireless music keyboard product called the C.24 at a press briefing last week. Compatible with MIDI over BlueTooth LE (low energy), the product is available for 24,800 yen ($206) at Softbank Selection, an online store by SoftBank Commerce and Service. Miselu launched a Kickstarter campaign for the musical instrument last year, and fundraised over $130,000, exceeding its initial goal of $99,000. Miselu founder and CEO Yoshinari Yoshikawa said they developed the product because musical instruments have constraints in where they can be played. To give users an experience similar to a real instrument, the Miselu team made the most of their patented technologies such as measuring the keyboard stroke strength with optical sensors and using repulsive force in magnetic field to reproduce an appropriate stroke weight of keyboards. Miselu provides a free iOS app called Key to facilitate playing of the keyboard. But users can play without the app by letting it connect with more than 350 Core MIDI-compatible apps such as Korg’s Module/Gadget and Apple’s Garage Band and Finger Piano Plus. While the product is compatible with iOS and Yosemite (MacOS X),…
Miselu CEO Yoshinari Yoshikawa (right) and Softbank Commerce and Service’s SBS unit head Hiroshi Matsuda (left) introduce the C.24 music keyboard products.
Silicon Valley-based Miselu, a startup developing “connected” musical instruments, unveiled a wireless music keyboard product called the C.24 at a press briefing last week. Compatible with MIDI over BlueTooth LE (low energy), the product is available for 24,800 yen ($206) at Softbank Selection, an online store by SoftBank Commerce and Service.
Miselu launched a Kickstarter campaign for the musical instrument last year, and fundraised over $130,000, exceeding its initial goal of $99,000. Miselu founder and CEO Yoshinari Yoshikawa said they developed the product because musical instruments have constraints in where they can be played. To give users an experience similar to a real instrument, the Miselu team made the most of their patented technologies such as measuring the keyboard stroke strength with optical sensors and using repulsive force in magnetic field to reproduce an appropriate stroke weight of keyboards.
Miselu provides a free iOS app called Key to facilitate playing of the keyboard. But users can play without the app by letting it connect with more than 350 Core MIDI-compatible apps such as Korg’s Module/Gadget and Apple’s Garage Band and Finger Piano Plus. While the product is compatible with iOS and Yosemite (MacOS X), the company is working on further developments so that the device will be able to be connected with Android handsets, Windows PCs, tablets, karaoke terminals, and smart TVs after next year.
Japanese popular sound director Taiyo Higuchi was invited to the conference as a guest presenter. He is well known for having produced songs for Softbank’s humanoid robot Pepper as well as Atarimae Taiso (literally meaning ‘No Surprise Exercise‘) for a Japanese comedy duo. Leveraging the portability of the keyboard, he said he wants to use it to compose songs outdoors such as at a beach, or grassland, or in caves, which typically have good acoustics.
Sound director Taiyo Higuchi
Muselu was launched in 2008, and is now a 16-person team comprised of engineers and designers from Apple, IBM, and MIT. The company has secured $6 million from investors including Japanese state-run startup fund Innovation Network Corporation of Japan (INCJ) to date. CEO Yoshikawa is a successful serial entrepreneur and has founded website production studio Digital Magic Lab in Tokyo followed by internet protocol technology-focused software development company IP Infusion in Silicon Valley.
They have not disclosed a sales target for Japan. They plan to introduce the product in the US in January 2015 following introduction to the Japanese market. Miselu has wireless communication regulation approvals in Korea, Hong Kong, and several other countries, so they will start shipping the product globally in the near future.
You can play a full eight-octave range by connecting four C.24 keyboards.
See the original story in Japanese. Japan’s Infinity Ventures Partners LLP (IVP) and Infinity e.ventures Asia Fund III L.P. (e.ventures) announced last week that it has invested in Farfetch Japan, the Tokyo-based joint venture by UK-founded global fashion e-commerce company Farfetch and IVP. Farfetch Japan has fundraised 720 million yen ($6 million) from IVP, e.ventures, Farfetch headquarters and other VC firms. Coinciding with the funding, the company appointed IVP’s Hirofumi Ono as an interim CEO as well as Akio Tanaka as a managing director. Ono and Tanaka are co-founders and managing directors of IVP. Infinity e.ventures Asia Fund was formed in November, and this is the first investment from the fund. See also: Infinity Venture Partners launches $100M third fund focusing on Japanese and Chinese startups Farfetch is a global community of over 300 fashion boutiques and provides them with an access to a marketplace where they can buy fashion items handpicked by Farfetch’s buyers from around the world. Farfetch has 120,000 listed items from 2,500 brands, which can be shipped to 170 cities in 29 countries 180 countries. While many of the items are shipped from European countries (especially Italy) to the US, demand from Asia has been increasing…
Japan’s Infinity Ventures Partners LLP (IVP) and Infinity e.ventures Asia Fund III L.P. (e.ventures) announced last week that it has invested in Farfetch Japan, the Tokyo-based joint venture by UK-founded global fashion e-commerce company Farfetch and IVP. Farfetch Japan has fundraised 720 million yen ($6 million) from IVP, e.ventures, Farfetch headquarters and other VC firms.
Coinciding with the funding, the company appointed IVP’s Hirofumi Ono as an interim CEO as well as Akio Tanaka as a managing director. Ono and Tanaka are co-founders and managing directors of IVP. Infinity e.ventures Asia Fund was formed in November, and this is the first investment from the fund.
Farfetch is a global community of over 300 fashion boutiques and provides them with an access to a marketplace where they can buy fashion items handpicked by Farfetch’s buyers from around the world. Farfetch has 120,000 listed items from 2,500 brands, which can be shipped to 170 cities in 29 countries 180 countries. While many of the items are shipped from European countries (especially Italy) to the US, demand from Asia has been increasing since 2013.
Their shipping method is unique in that boutiques will pack items in a box of their own design then ship it to users instead of shipping from Farfetch’s warehouse, aiming to give users an experience as if they had visited and bought items at the boutique’s storefront. Some users buy items totaling at over $400,000 a year using the e-commerce platform.
With offices in London, New York, and Los Angeles, Farfetch has fundraised $66 million since its launch in 2008. Their Japanese version was launched in August 2014, and revenue has reached several million US dollars. Tokyo-based Restir joined the Japanese edition as the first boutique from the Japanese market, and the company aims to acquire 10 to 15 boutiques by the end of 2015.
Masaru Ikeda
Takeshi Hirano
