Japanese marketplace app Mercari launches own fund to invest in C2C startups


See the original story in Japanese.

In January of 2016 Japanese C2C (consumer-to-consumer) marketplace app Mercari announced a 450 million yen (about $4.1M US dollars) investment in Base, the Japanese version of Shopify, effectively shocking it back to life.

Somehow it feels as if the Japanese entrepreneurial ecosystem has been enriched.

On Tuesday Tokyo-based Mercari revealed their project “Mercari Fund” to invest in startups specialized in C2C products/services and marketplaces. It is an “investment project” with Mercari itself making the investments rather than establishing an investment arm or subsidiary. The companies invested in will also be considered for partnerships with Mercari’s services, such as Mercari (marketplace app) and Mercari Atte (a service enabling users to sell/buy stuff on a meeting basis).

Up to now, Mercari has been investing in startups such as Base (Shopify-like instant e-commerce platform), Rentio (rental service of home appliances and camera), Flamingo (language learning service). In February of this year they acquired Zawatt, the Japanese startup which has been operating the Sumaoku flea market app.

Although I confirmed the company’s goals, I feel that the main purpose is to create an economic zone with Mercari at the center, meet the needs of even more users, and carve out a secure place for themselves. One example is Kauru, Mercari’s new service released in May, it takes the established market of books and gives an enriched user experience by providing them with estimated market prices from information gained when they input a barcode.

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It is possible to tackle this type of specialized service through their own initiative alone, but if they are looking to expand the economic zone more speedily, investment will be a natural way. I also confirmed this, but we can assume there will be more cases of acquisition, similar to Zawatt. Regarding concrete methods of collaboration, the company is considering further collaborations with Mercari ID and Atte, and has plans to make this information public in the future.

Also, while the individual investment amount will not be disclosed, keeping in mind the considerable investment volume of 450 million yen in Base in January of last year, we can think of it as being in the investment amount range where business synergies are felt and adjust it individually. Unlike an investment fund that keeps external funds here and there, it will be an investment project purely for business synergy.

Translated by Amanda Imasaka
Edited by Masaru Ikeda