Japan’s handmade item marketplace Creema raises $10M to win fierce competition

Japan’s handmade item marketplace Creema raises $10M to win fierce competition

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L to R: Tomohiro Ebata (Director, Head of Business Development and Investment, KDDI), Keisuke Tatsuoka (Global Brain), Kotaro Maruyabayashi (CEO, Creema), Akihiro Higashi (Principal, Globis Capital Partners), Minoru Konno (Partner & COO, Globis Capital Partners)

See the original story in Japanese.

Tokyo-based Creema, the Japanese startup behind C2C (consumer-to-consumer) marketplace for handmade items under the same name, announced that it fundraised about 1.1 billion yen (about $10 million) in the latest round led by Globis Capital Partners (GCP). For Creema, this is the fourth round following the previous 100 million yen funding from KDDI Open Innovation Fund (KOIF for short, jointly operated by leading Japanese telco KDDI and VC firm Global Brain) back in June 2014. In addition to GCP, participating investors in the latest round were KDDI, Global Brain and SMBC Venture Partners, in addition to Creema founder/CEO Kotaro Marubayashi himself.

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Launched back in 2010, the Creema marketplace lists more than 2.4 million handmade items from over 60,000 registered creators. While the handmade C2C market in Japan grew by 250% YoY in transaction volume, Creema revealed that they had seen a 450% growth from last year.

Currently the Japanese handmade market is fiercely competitive as it has in operation more than 40 marketplaces within. However apparently most deals are being aggregated into the top 4 marketplaces: Minne (backed by GMO), Tetote (backed by GMO), Iichi (backed by Hakuhodo group and Taiwan’s handmade C2C marketplace Pinkoi) and the amply-funded Creema.

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Creema will use the funds to strengthen system development as well as marketing efforts for service recognition. They had been dependent for such recognition upon word of mouth among users, now expecting to hit 10 billion yen (about $92 million) in gross merchandise volume for 2016 (this number is coincidentally matched with that of competitor Minne).

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Creema’s mobile app

According to Marubayashi, the average market price for each deal at Creema is over twice that at other marketplaces since users therein tend to trade handmade items with elaborate designs crafted by professionals. Recently Creema started dealing with food products where bakers and pâtissière sell their original breads or cakes while farmers sell handmade salad dressings and juices.

The consolidated annual merchandise volume from the two major C2C marketplaces of Japan, Yahoo Auction and Mercari, is to near the 1 trillion yen (or about $9.2 billion) mark by this yearend. Given that handmade item deals are included in these stats, we can see that the handmade item marketplaces still have a great potential for further growth.

Edited by “Tex” Pomeroy