Japanese e-commerce platform Base raises $13M, launches payments service subsidiary

L to R: Pay CEO Kenichi Takano, Base CEO Yuta Tsuruoka
Image credit: Base

See the original story in Japanese.

Tokyo-based Base, the e-commerce platform provider dubbed Japan’s answer to Shopify, announced on Thursday that it has fundraised 1.5 billion yen (about $13.3 million US) from Japanese VC firm Global Brain and Japanese accounting SaaS (Software as a service) provider Money Forward (TSE:3994). This round was led by Global Brain but no financial term of the deal has been disclosed. Base has partnered with Money Forward to share a potential user base of SMEs (small and medium-sized enterprises) with each others. Using the funds, Base plans to strengthen hiring talents to solidify management foundation.

On the same day, Base announced that it has spun off payments platform businesses, such as PAY.JP and PAY ID, to set up a fully-owned subsidiary called Pay. Kenichi Takano, the current project leader for payment platform businesses at Base, was appointed CEO for the new company while Base CEO Yuta Tsuruoka joined the management board.

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Expanding beyond e-commerce platform

Image credit: Pay

The highly anticipated e-commerce platform has been advanced to the next stage by serving 450,000 merchants and 3 million mobile app users while their payments business has processed transactions 40 times more than that one year ago. Tsuruoka showed his confidence by seeing some actual performance indicators are higher than disclosed ones while his company claims that it saw the greatest growth last year since its launch.

In response to our question about the situation of Base Live, the company’s recently-launched live commerce platform that enables merchants to introduce and sell products through live performance, he told us that it still gives them some impact on transactions while there are many apparel merchants whose monthly sales reach nearly 1 million yen ($8,800). However, the live commerce platform has become popular among merchants in view of another channel for creating a fan base.

This large-scale funding may be based on all these results. Regarding the purpose of the funding, Tsuruoka says:

Our funding purpose has been changed from surviving to growing.

No doubt that the payments business was spun off because this space has high potential for extensive growth. While the Base platform has been esteemed because it allows anyone to easily build an e-commerce presence, the company’s payments businesses have to deal with different types of data and serve diverse user demographics. So the company spin-out is reasonable in optimizing their decision-making process from now on.

The company now has a staff of about 100 people, which is doubled from last year, including 20 staffers in charge of payments businesses.

On a related note, Base unveiled on Thursday that it has launched another fully-owned subsidiary called Base Bank. They claim the new company will target a new business area but no further details have been disclosed. In view of Japanese C2C marketplace startup Mercari having invested in Base and founded a new business-focused subsidiary called Souzoh, Base Bank may aim at a similar goal like building various apps and diversifying businesses.

Translated by Masaru Ikeda
Edited by “Tex” Pomeroy