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Tokyo-based Coconala, previously known as WelSelf, offers an online platform under the same name where you can buy and sell knowledge, skills and, experience from users who are willing to teach. The company announced on Tuesday that it has fundraised a total of 540 million yen (about $4.4 million) from Jafco, Nissay Capital, SMBC Venture Capital, and Voyage Ventures in mid-November. This follows their previous $1.5 million funding from four investors back in September of 2013.
Since its launch back in July 2012, the platform has acquired more then 200,000 registered users and over 50,000 micro jobs that you can ask, which has massively increased from 30,000 micro jobs registered as of April.
Coconala CEO Akiyuki Minami says,
Coconala has been steadily growing in the last three years, keeping a growth rate of 13% on a monthly basis. Since this relies in large part on word-of-month effects, now we can expect that our users recall and recognize our brand.
Skills marketplace in affordable prices
He claimed that Coconala connects individuals for buying and selling their skills, aiming to fulfill needs and solve problems unlike typical crowdsourcing platforms. Coconala provides a broad range of services for sellers including fortune-telling, relieving mental anguish, illustration, design, consultation for hobbies and travel destinations. Giving opportunities for users to ask about what they don’t know who they should ask other than their friends is the value proposition of the Coconala platform. That’s why many of services on the platform available for starting at 500 yen (about $4).
The repeat rate of their users is so high that they typically continue using a service once they start doing it. According to the company’s analysis regarding their repeat users, it saw more than 30% of heavy users have purchased services in five or more categories on the platform while over 70% of heavy users have purchased services in three or more categories. They also revealed that 25% out of all these heavy users have submitted their services to other buying users. Minami told that this tendency proves that the platform has our users’ daily lives through experiences starting with buying then submitting services followed by more buying from multiple categories.
Now we have remarkable figures. The average monthly spending per users is nearly hitting 6,000 yen (about $49). Users can sell a service for starting at 500 yen, but popular sellers are permitted to provide premium optional services as well as telephone consultation for starting at 100 yen (about $0.80) per minute. Some sellers can earn over 800,000 yen ($6,500) a month. In addition, many users purchase services several times in a month. Thanks to the synergistic effect from the increasing number of purchases, the high repeat purchase rate, and the rise in unit price, users’ monthly purchase amount (ARPU) has been increasing.
This C2C (consumer to consumer) approach appeals to users with its low costs for both supplier and consumer. The low costs are enabled by its flexible cycles. This means the seller can purchase a service and the buyer can sell a service
At the same time, we have been trying to provide diverse categories, not depending on some specific category, which assures the users that they can find advise they need at Coconala of a wide range. We consider this funding to be a major turning point for us in taking another stride forward.
Coconala succeeded in establishing entrances for consultation services while they were adding various categories they deal in. They said the funding will be used not only to expand consultation services but also to solidify the foundation for creating a customer collection engine. In a press conference on Tuesday, they shared the “Coconala Platform Framework.”
By this business model, in addition to the commission fee to be collected when a deal is sealed under the current system, Coconala will charge a service provider to ensure income from advertisement, and will expand the business area to providing the solutions that are placed beyond consultations.
With the repeat rate we attained under the existing system and the unaided recall capacity of the service itself, we were able to set up the window for obtaining users. Now we are ready to connect with areas promising bigger business opportunities.
For example, we can show legal consultation ads to users who use fortune-telling services or divorce consultation services, and we can connect with the travel industry by providing a travel package to the user who comes to ask about possible travel destinations.
We can act as a bridge between an easy consultation and larger markets in various categories. With this framework, the user can first ask advise at Coconala, then go to purchase what they want or need without googling.
For upselling, the company may start selling services by themselves on the platform in addition to earning commission fees from ad sales and driving user traffic to service providers. Upon the investment from Voyage Ventures at this time, Coconala thinks that they will start massively investing in marketing efforts in partnership with Voyage’s media outlets and adtech business such as EC Navi, Pex, Research Panel, and Fluct.
Minami said, while covering entrances to various business areas, they will develop their own business and sometimes acquire EC services to make Coconala a real business “Coconala economy bloc.” Their goal is to go IPO during 2018.
We understand that Coconala has been establishing their service while looking further into the future of the C2C marketplace. We can expect their further growth based on the user community and culture that they have cultivated and nourished.
Translated by Moto Tsujino via Mother First
Edited by “Tex” Pomeroy and Masaru Ikeda