Taizo Son spoke at the Ventures Forum 2017 by SoftBank Ventures Korea (formerly) in Seoul. Image credit: SoftBank Ventures Asia
Taizo Son, founder of Mistletoe, a collective impact community comprised of startups and innovators, and Atsushi Taira, co-founder and chairman, have established a new company called The Edgeof. The new company has agreed with SoftBank Group to acquire SoftBank Ventures Asia, the group’s wholly owned subsidiary. The deal is expected to be completed by the end of 2023. (The new company has incidentally the same name with the game-changing studio Son joined the launch of, which shut down during the pandemic.)
SoftBank Ventures Asia was established in Seoul in 2000 under its previous name of SoftBank Ventures Korea. Originally investing in South Korean startups, the firm rebranded its name in 2019 as it has increased its investments beyond the country into the Southeast Asian and Chinese markets. The fund’s current AUM (Assets Under Management) has reached around $2 billion, with offices in Seoul, Beijing, Singapore, and San Francisco, and focuses on ICT investments, including AI, IoT, and smart robotics.
SoftBank Ventures Asia’s notable investments to date include Indonesian e-commerce unicorn Tokopedia (which later merged with Gojek and went public in Indonesia), sneaker and other fashion item marketplace Kream, POS startup Moka, used car portal Carro, P2P lender Funding Societies, C2C marketplace Sendo, co-working space operator EV Hive, as well as AI leaning app developer Mathpresso.
Meanwhile, Mistletoe has so far invested in about 170 companies from 15 countries. Since its foundation back in February of 2016, its notable investments include online gaming giant and unicorn Garena, blockchain-based startup-focused stock exchange Funderstream, Singapore-based data-driven venture investment platform Hatcher+, among others. We haven’t confirmed whether or not any change will be made to the respective funds managed by SoftBank Ventures Asia and Mistletoe.
SmartRyde, the Japanese startup behind a global airport transfer marketplace under the same name, announced that it has secured approximately 450 million yen (about $3.4 million) in a Series A+ round. This round was led by NVenture Capital (a subsidiary of NEC Capital Solutions), with participation from SMBC Venture Capital, Yamaguchi Capital, Hiroshima Venture Capital, Shigagin Local Innovation SD Fund (managed by Shiga Bank and Quantum Leaps Capital Partners) and Iyogin Capital. The amount includes loans from Japan’s state-run loan company Japan Finance Corporation. This follows a seed round in December of 2019 and a Series A round in October of 2021. Among the investors participating in this round, SMBC Venture Capital, Yamaguchi Capital, Hiroshima Venture Capital, and Iyogin Capital followed their previous investments. The latest round brought the startup’s funding sum to date up to at least 630 million yen ($4.7 million). Originally known as DLGP, SmartRyde was founded in March 2017 by founder Sota Kimura, a student at Ritsumeikan University, after he was ripped off by a cab driver on his way from the airport to the city in Thailand. The company has worked with airport transfer cab companies at over 700 airports in 150 countries, as well…
SmartRyde, the Japanese startup behind a global airport transfer marketplace under the same name, announced that it has secured approximately 450 million yen (about $3.4 million) in a Series A+ round. This round was led by NVenture Capital (a subsidiary of NEC Capital Solutions), with participation from SMBC Venture Capital, Yamaguchi Capital, Hiroshima Venture Capital, Shigagin Local Innovation SD Fund (managed by Shiga Bank and Quantum Leaps Capital Partners) and Iyogin Capital. The amount includes loans from Japan’s state-run loan company Japan Finance Corporation.
This follows a seed round in December of 2019 and a Series A round in October of 2021. Among the investors participating in this round, SMBC Venture Capital, Yamaguchi Capital, Hiroshima Venture Capital, and Iyogin Capital followed their previous investments. The latest round brought the startup’s funding sum to date up to at least 630 million yen ($4.7 million).
Originally known as DLGP, SmartRyde was founded in March 2017 by founder Sota Kimura, a student at Ritsumeikan University, after he was ripped off by a cab driver on his way from the airport to the city in Thailand. The company has worked with airport transfer cab companies at over 700 airports in 150 countries, as well as with more than 25 OTAs (online travel agencies) such as Booking.com, Expedia, Trip.com, Traveloka, and Despega. The company offers airport transfer cab sales service to users purchasing airline tickets through OTAs.
SmartRyde
The service is beneficial to both OTAs and travelers. For travelers, it frees them from the hassle of finding transportation to downtown at the airport. You may know Uber, Grab, and other ridehailing services are not allowed to operate to protect the employment of local cab drivers in selected countries. Furthermore, it may be very helpful to have a driver with your name waiting for you in the arrival lobby, and to have a means of transportation in advance in an environment where you may be less familiar with the language in the destination.
Meanwhile, OTAs are a very thin margin business. They are trying to diversify their product lines to car rentals and various activities in addition to airline tickets and accommodations, but price competition among them intensifies as users try to choose the cheapest option by comparing results from multiple OTAs. Furthermore, OTAs can’t sign contract with every single airport cab operator in the world, but having a bundler like SmartRyde simplifies the coordination process and creates an additional revenue stream.
In conjunction with the funding announcement, SmartRyde also announced the launch of its Demand Partner API, which allows OTAs and airlines to gain additional revenue by selling airport transfer services to customers along with hotel and flight sales.
Since its previous round, SmartRyde has increased its pipeline by integrating its system with Nippon Travel Agency, collaborating with the Splyt mobility service interconnection provider, working with WAmazing offering digital services for inbound travelers to Japan, as well as working with the national flag carrier’s subsidiary and travel agency JALPAK. In August, the company welcomed Alvin Leonard, a former technical manager at Tripadvisor and engineering manager at Alassian, as CTO.
Orange Fab Asia, a startup accelerator run by French telecom giant Orange in the region, came to an end in October after nine years of activity. We had been wondering what was going on with Hiroshi Nishikawa (西川浩司), who has been supervising the program, and others involved, but as for Nishikawa, we learned that he had joined MoBagel (行動貝果), the Taiwanese founder-led startup offering an AI (artificial intelligence) and ML (machine learning) platform. MoBagel was founded in March of 2015 and is currently headquartered in Santa Clara, US. The company has secured about $20 million in total to date, mainly backed by Taiwanese VC firms and others. Some of our readers may recall that they delivered a pitch at Slush Asia, Rising Expo as well as having been selected by AppWorks and SparkLabs Taipei for their respective acceleration programs. We learned that MoBagel has established a Japanese subsidiary called Solve AI while Nishikawa has been appointed as its CEO to launch a cross-border open innovation program called the Solve AI Challenge. The program aims to connect enterprises (partners) seeking ideas and startups that want to propose ideas on topics such as AI and data collection and analysis. According to Nishikawa,…
Image credit: MoBagel
Orange Fab Asia, a startup accelerator run by French telecom giant Orange in the region, came to an end in October after nine years of activity. We had been wondering what was going on with Hiroshi Nishikawa (西川浩司), who has been supervising the program, and others involved, but as for Nishikawa, we learned that he had joined MoBagel (行動貝果), the Taiwanese founder-led startup offering an AI (artificial intelligence) and ML (machine learning) platform.
MoBagel was founded in March of 2015 and is currently headquartered in Santa Clara, US. The company has secured about $20 million in total to date, mainly backed by Taiwanese VC firms and others. Some of our readers may recall that they delivered a pitch at Slush Asia, Rising Expo as well as having been selected by AppWorks and SparkLabs Taipei for their respective acceleration programs.
We learned that MoBagel has established a Japanese subsidiary called Solve AI while Nishikawa has been appointed as its CEO to launch a cross-border open innovation program called the Solve AI Challenge. The program aims to connect enterprises (partners) seeking ideas and startups that want to propose ideas on topics such as AI and data collection and analysis. According to Nishikawa, the name of the program was inspired by the Startup Challenges program at VivaTech, an annual startup conference in Paris to which Orange Fab Asia’s selected teams were often invited.
It has not yet been known what companies will participate as partners, but we have been told that one major Japanese tech company has been confirmed to join so far. In the program, every partner will individually set their Challenge topic while startups are requested to propose methods and ideas for solving it. Partners will offer some benefits (financial rewards, invitations to startup events, business collaboration opportunities, etc.) to the startups with the most highly evaluated proposals.
Image credit: MoBagel
According to Nishikawa, when Orange Fab Asia was about to end, Adms Chung (鍾哲民), CEO of MoBagel, also one of the alumni from the program, heard about it and proposed Nishikawa to launch an open innovation program in MoBagel. The new company, Solve AI, will focus on building a startup ecosystem around AI and data, with the intention of finding potential users for MoBagel in the future.
The Solve AI Challenge will make full use of the vast network that Nishikawa has cultivated at Orange Fab Asia. Danny Han and Clare Fan, former directors of Orange Fab Asia in Seoul and Taipei respectively, will participate as advisors for the new program. Taking advantage of their global presence with offices in Santa Clara, Taipei, Tokyo, Shanghai, and Singapore, MoBagel will fully assist operating the Solve AI Challenge with considering offering MoBagel products free of charge to startups participating in the program.
In the program, each partner will evaluate and select startups to work with on their respective conditions. After several months of PoC (proof-of-concept), the Demo Day is expected to take place to showcase their results. The approach of inviting startups from different partners in the same industry to collaborate on a specific topic is similar to what Plug and Play and others have been running. Solve AI is currently inviting partners for the program while details will be announced in the future.
This guest post is authored by Cherubic Ventures. Founded in 2014, they are an early-stage venture capital firm that’s active in both the US and Asia, with a total AUM of 400 million USD. Focusing on seed stage investments, Cherubic aims to be the first institutional investor of the next iconic company and back founders who dare to dream big and change the world. Their team sits across San Francisco, Singapore, and Taipei. The Japanese translation of this article is available here. The global tech industry is seeing wave after wave of layoffs, from the unicorn level to the top internet giants. Statistics from Layoffs.fyi show that in the less than three months since the start of 2023, layoffs have already exceeded 100,000, with Google, Microsoft, and Meta topping the list. It’s easy to write these job cuts off to companies cutting spending during an economic downturn, but take a deeper look. The mainstream adoption of work automation tools coupled with the effects of the pandemic has led to a tremendous shift in how manpower is used and organized. And we need to pay attention to the fact that the target of these layoffs has been in many cases middle…
This guest post is authored by Cherubic Ventures. Founded in 2014, they are an early-stage venture capital firm that’s active in both the US and Asia, with a total AUM of 400 million USD. Focusing on seed stage investments, Cherubic aims to be the first institutional investor of the next iconic company and back founders who dare to dream big and change the world. Their team sits across San Francisco, Singapore, and Taipei.
The Japanese translation of this article is available here.
Middle Management by Paul Hudson via Flickr Used under the Creative Commons Attribution 2.0 Generic license.
The global tech industry is seeing wave after wave of layoffs, from the unicorn level to the top internet giants. Statistics from Layoffs.fyi show that in the less than three months since the start of 2023, layoffs have already exceeded 100,000, with Google, Microsoft, and Meta topping the list.
It’s easy to write these job cuts off to companies cutting spending during an economic downturn, but take a deeper look. The mainstream adoption of work automation tools coupled with the effects of the pandemic has led to a tremendous shift in how manpower is used and organized. And we need to pay attention to the fact that the target of these layoffs has been in many cases middle management.
A recent Bloomberg report discovered that in its latest wave of job cuts, Google has targeted mid-level managers, of which the company revealed it has over 30,000. At the same time as this news, Meta identified 2023 as its “Year of Efficiency”. Tesla CEO Elon Musk has always been at the front of the “lean and mean” approach to management, so it’s no wonder that when asked about his least favorite part of running Twitter, his answer was that every engineer’s code seems to be managed by ten people.
Managers are supposed to make organizations more efficient in hitting targets, but in the current environment, the word “management” is starting to be seen as the new enemy of workplace efficiency and agility.
There seem to be 10 people “managing” for every one person coding
In a tech industry where new technologies can be iterated rapidly and agility is essential to survival, companies are putting more stock in the “lean” mentality. But there’s no getting around the reality that as companies scale, they need to expand their workforce, which is why they need managers to handle communication and make sure all departments are aligned.
However, the result is that managers’ time becomes more and more consumed by managing communication. And when management has no time left for more growth-focused, value-added tasks, companies fall into the trap of organizational hypertrophy. Thus enters the concept of “human routers”, or mid-level managers with little function outside of organizing and disseminating information.
Work automation tools are rewriting the nature of work
The root cause of this trend is that automation and productivity tools are rewriting the nature of work. Today’s software tools can essentially perform the historical functions of mid-level managers, e.g. supervising team productivity, overseeing progress, and document management. At Cherubic Ventures, our productivity tool JANDI solves the interdepartmental communication pain point by letting us create special chat groups based on project, department, task, or topics. It can also assign tasks, monitor progress, and integrate with other apps such as Google Calendar and Salesforce.
A study by a Wharton Business School professor points out that automation in fact creates jobs, referencing how machinery freed past generations of farm workers to take on jobs in the newly created service industry. But when machines can take over tasks like reviewing reports, and perform them without human error, a reduction in the need for managers is inevitable – Gartner predicts that nearly 70% of daily tasks for middle managers will be fully automated by 2024, which will lead to a complete reshaping of this role.
The recent emergence of generative AI like ChatGPT and Midjourney give us a picture of where work automation is heading. All that these tools require is a few keywords or prompts to automatically generate blog posts or design images, with the human user only providing instructions and suggestions for optimization.
This does not, however, signal the end of management. If managers use automation tools to their advantage, more time will be released for high-level tasks such as team building and talent cultivation. And as the 2021 Harvard Business Review article “It’s Time to Free the Middle Manager” emphasizes, companies need to start looking at alternatives to the traditional promotion systems that allow workers to advance without necessarily taking on management responsibilities.
It’s a historical pattern that every new technology results in the replacement of some jobs. The only other constant is that those growth-minded individuals who are not afraid to disrupt the status quo and can coexist with the new technology will always come out on top.
This guest post is authored by Cherubic Ventures. Founded in 2014, they are an early-stage venture capital firm that’s active in both the US and Asia, with a total AUM of 400 million USD. Focusing on seed stage investments, Cherubic aims to be the first institutional investor of the next iconic company and back founders who dare to dream big and change the world. Their team sits across San Francisco, Singapore, and Taipei. The Japanese translation of this article is available here. ChatGPT has triggered a wave of generative AI products, which is creating huge ripples in the tech space. In just one week, the number of ChatGPT users exceeded one million, making it the fastest growing software in history, surpassing both Twitter and Facebook. New AI tools in areas like copywriting, coding, interior design, are popping up one after another, and generative AI is already the darling of the venture capital world. According to CBinsight data, the amount of financing related to generative AI in 2022 will exceed 2.6 billion US dollars, almost double the amount of 2021. Tech giants like Microsoft and Google are rolling out new AI products in a display of strength to see who will…
This guest post is authored by Cherubic Ventures. Founded in 2014, they are an early-stage venture capital firm that’s active in both the US and Asia, with a total AUM of 400 million USD. Focusing on seed stage investments, Cherubic aims to be the first institutional investor of the next iconic company and back founders who dare to dream big and change the world. Their team sits across San Francisco, Singapore, and Taipei.
The Japanese translation of this article is available here.
Used under the Creative Commons 0 license via PublicDomainPictures.net.
ChatGPT has triggered a wave of generative AI products, which is creating huge ripples in the tech space. In just one week, the number of ChatGPT users exceeded one million, making it the fastest growing software in history, surpassing both Twitter and Facebook. New AI tools in areas like copywriting, coding, interior design, are popping up one after another, and generative AI is already the darling of the venture capital world.
According to CBinsight data, the amount of financing related to generative AI in 2022 will exceed 2.6 billion US dollars, almost double the amount of 2021. Tech giants like Microsoft and Google are rolling out new AI products in a display of strength to see who will own the last word in the AI era.
But this surge in generative AI reminds me of the launch of location-based services 15 years ago.
Location-based technology dominated the entrepreneurial conversation in those years, propped up by the launch of the iPhone in 2008. New products leveraging the technology in areas such as social media, shopping, and dating emerged one after another, each of them aiming to be the next big platform for the time.
Let’s look at Foursquare as a prime example of where the “location-based wars” started and how they’re going. We all remember the check-in and location sharing for badges functions, which helped the app break one million users in just one year after its launch, overtaking Twitter, which took two. This led to Foursquare attracting $70 million in VC funding. Internet giants like Facebook, Google, Groupon, and Twitter all followed suit, aggressively acquiring location-based tech startups to offer similar services. Those startups have all since changed their business models or disappeared. And the originally consumer-facing Foursquare is now a data analysis provider for enterprises.
The lesson is that new tech always creates huge opportunities and triggers entrepreneurship, but only a few startups can survive till the end. So what mindset should we adopt around generative AI?
As time passes, startups built entirely on new tech will lose their advantage as soon as the barrier to implementing that technology is lowered. So will it be when AI eventually becomes a commodity that any company can integrate into its services with just a few lines of code. That’s exactly what happened with location-based services. At times like these, it’s those startups that can solve the most user pain points and retain those users that will make it through the night.
In the face of new technologies, founders need to go back to the essentials of entrepreneurship and first ask themselves what pain points they can solve and in which industries. Only after they have taken these first two steps should they ask: “What role can the new tech play in this use case?” Location-based technology enabled Uber and Google Maps to exist, but neither company defined themselves as “location-based services companies”. They started from the perspective of which transportation pain points needed fixing.
Whether you are a founder or an investor, as long as you can return to the essence of the problem every time a new technology arrives, the answers to these questions will become clear.
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). He is the Managing Partner of Shizen Capital (formerly known as Tachi.ai Ventures) in Japan. You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. One key component of our investment thesis at Shizen Capital is our view on exit opportunities for early-stage startups in Japan. We believe that Japan has now reached an inflection point, and that corporate M&A for Japanese startups is poised to go intergalactic. Historically, an IPO has been the most common and viable way for VC-backed startups in Japan to exit. The Mothers market of the Tokyo Stock Exchange (now re-branded as TSE Growth) functions so well that even microcap companies in the $10 million valuation range could go public. This has proven to be a double-edged sword, a topic on which I should probably elaborate in a longer post. (TL;DR: The main benefit accrues to VC funds by providing…
This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.”
He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). He is the Managing Partner of Shizen Capital (formerly known as Tachi.ai Ventures) in Japan. You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.
License free image by Steve Bidmead via Pixabay
One key component of our investment thesis at Shizen Capital is our view on exit opportunities for early-stage startups in Japan. We believe that Japan has now reached an inflection point, and that corporate M&A for Japanese startups is poised to go intergalactic.
Historically, an IPO has been the most common and viable way for VC-backed startups in Japan to exit. The Mothers market of the Tokyo Stock Exchange (now re-branded as TSE Growth) functions so well that even microcap companies in the $10 million valuation range could go public. This has proven to be a double-edged sword, a topic on which I should probably elaborate in a longer post.
(TL;DR: The main benefit accrues to VC funds by providing them a convenient path to exit, but not without drawbacks: such as curtailing ambitions of private companies, creating misalignment risk with IPO preparation service providers, forcing a generation of entrepreneurial founders into becoming public company administrators, and depriving Japan‘s VCs of the opportunity to learn one of the most important skills of being a good VC, which is positioning a startup for M&A).
Paradoxically, all of our exits from our Japan funds have been via M&A, including my own personal career high. Although our particular track record in Japan seems to represent an exception, we believe that M&A transactions of Japanese startups is about to increase exponentially. We see three principal drivers at play here:
1. Shift in sentiment among founders
We’re observing an unmistakable shift in perspective among founders in Japan that selling their company via M&A is no longer an admission of failure. If you’re surprised when reading that last bit, I too was surprised myself. One of my innumerable discoveries upon launching my first fund in Japan was how Japanese founders had been educated to view an IPO as their proof of success, and that selling their company to another firm implied that they couldn’t make it. At minimum, M&A was viewed as a Plan B at best.
Fortunately, this attitude is changing. While it’s impossible to pinpoint the specific reasons for this shift in mindset, I suspect a couple of contributing factors. Japan may well have reached a critical mass of startup founders who have pursued the IPO path. These founders now manage listed companies — with all the accompanying obligations of compliance and investor relations that a public listing entails — and they are unhappy in their newfound managerial roles, with daily responsibilities far removed from life as a startup entrepreneur. Anecdotally, we have spoken with a handful of such individuals who have confided in us that they are miserable, that they reminisce nostalgically for the days when they could simply tinker and build in harmony with their intrinsic motivations as “0-to-1” entrepreneurs.
Another potential contributor to the changing perceptions is the increasing number of foreign entrepreneurs in Japan, who do not carry the same emotional baggage related to M&A and are setting the example.
2. A tax break for corporations that acquire domestic startups
As part and parcel of the Japanese government’s startup nation agenda, a new tax policy will grant Japanese corporations a tax break in acquiring domestic startups. Under this new scheme, corporations will be able to deduct 25% of their acquisition price from their taxable income up to ¥5 billion (~ $40 million) per transaction and up to an aggregate of up to ¥12.5 billion (~ $100 million) in tax deductions every year.
This new tax deduction could help surmount the “not-invented-here” syndrome prevalent in many Japanese corporations, who in reality are desperate to complement their laudable in-house innovation efforts with innovation from outside the corporate walls. This has the potential to shake up internal corporate incentives. Once a few initial corporations take advantage of the tax deduction, others will likely follow suit, and increase their own M&A activities in emulation. [Note: there remains a minor issue related to goodwill depreciation but this is under review.]
3. A new macroeconomic paradigm of inflation
Inflation has arrived in Japan too. Although not quite yet as severe as the other G7 countries, Japan has recently printed a 41-year high in inflation at nearly 4.3%. Accordingly, we are detecting a growing sensitivity among corporate executives to this new inflationary environment. With over $3 trillion worth of cash in aggregate on their balance sheets (yes, that’s trillion with a ‘T’), corporate Japan faces an increasingly obvious choice: ramp up investment in long overdue digital transformation, or dither while inflation erodes their capital.
Taken together, we believe that the above factors will drive a virtuous cycle. Increased M&A for early-stage ventures in turn will provide a new generation of founders with a taste of company-building accompanied by modest wealth creation. If the experience of European ecosystems is any guide, this first step will likely motivate a subset of these successful founders to jump back into entrepreneurship and to aim even higher. Others may become early-stage VCs themselves, another boon to a startup ecosystem in which few VCs today possess startup experience.
In our view, this context augurs well for early-stage venture investing in Japan overall.