THE BRIDGE

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Japan’s in-car security startup Trillium secures series A funding from Global Brain

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See the original story in Japanese. Nagoya-based Trillium, the Japanese startup providing security solutions for connected cars and autonomous motives, announced today that it has fundraised in a series A round led by Japanese investment firm Global Brain. Financial details of the deals have not been disclosed but the size of the funding this time is supposed to be multi-million dollars. Since this round is not closed, the company is exploring additional funding from other VC firms or businesses. The company was launched in September 2014 by David Michael Uze who previously served as Japan country manager of leading semiconductor companies, for both AMD and Freescale Semiconductor (acquired by NXP Semiconductors in 2015). Its board of directors include notable names like Nobuhiko Koyama, the head of the company behind the APR Racing Team participating in the Super GT 300 championship, as well as Sachio Senmoto who has founded well-known Japanese companies DDI (now a part of Japanese leading telco KDDI) and eAccess (now known as Y! Mobile, the mobile carrier unit under Yahoo Japan). Last year, two American hackers conducted test hacking attacks to a Uconnect-installed Jeep Cherokee driven by a reporter of Wired Magazine, which stunned IoT and connected…

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L to R: Hidetaka Aoki (venture partner, Global Brain), Naoki Kamimaeda (venture partner, Global Brain), Yasuhiko Yurimoto (CEO, Global Brain), David Michael Uze (CEO, Trillium), Nobuhiko Koyama (managing director, Trillium), Aaron Benedek (chief architect, Trillium)

See the original story in Japanese.

Nagoya-based Trillium, the Japanese startup providing security solutions for connected cars and autonomous motives, announced today that it has fundraised in a series A round led by Japanese investment firm Global Brain. Financial details of the deals have not been disclosed but the size of the funding this time is supposed to be multi-million dollars. Since this round is not closed, the company is exploring additional funding from other VC firms or businesses.

The company was launched in September 2014 by David Michael Uze who previously served as Japan country manager of leading semiconductor companies, for both AMD and Freescale Semiconductor (acquired by NXP Semiconductors in 2015). Its board of directors include notable names like Nobuhiko Koyama, the head of the company behind the APR Racing Team participating in the Super GT 300 championship, as well as Sachio Senmoto who has founded well-known Japanese companies DDI (now a part of Japanese leading telco KDDI) and eAccess (now known as Y! Mobile, the mobile carrier unit under Yahoo Japan).

Last year, two American hackers conducted test hacking attacks to a Uconnect-installed Jeep Cherokee driven by a reporter of Wired Magazine, which stunned IoT and connected car addicts around the world by revealing the vulnerability of in-car control systems.

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Thanks to the spread of IoT-optimized SIM cards such as Soracom, connected cars can become more convenient but also more vulnerable against attacks from hackers regardless of how far the targets are located from them. Security countermeasures against these attacks can be categorized into three layers: V2I (vehicle to infrastructure), smart firewall and IVN (in-vehicle networks). Trillium is focused on offering security solutions on the IVN layer.

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According to Trillium CEO Uze, since IVN has followed an old standard based on a 16-bit core technology developed more than 20 years ago, it’s quite difficult to implement security solutions on an unresourceful chipset environment.

About 50 to 130 ECUs (electronic control units) are installed on an automobile. It’s possible to add a security chip to each of them but it would be costly and wouldn’t support OTA (over-the-air) software updates on an ECU scale. By writing codes in sizes of less than 10 kilobytes to chipsets in an ECU, we made software-based security implementation fully possible.

Similar to the SSL (secure sockets layer) technology for website integration, Trillium has succeeded in implementing a completely software-based security solution (SecureCAN) for an in-vehicle control area network connecting ECUs, which supports end-to-end encryption, authentication and key management. The company has also secured interoperability by offering appropriate security programs for different chipsets by various ECU developers.

One of the company’s value propositions is that they can offer not only security software for CAN but also one-stop solutions including multiple security countermeasures and program update technology for LIN (local interconnect network), which controls actuators of various in-car devices, as well as for OTA, FlexRay and Ethernet. It would be possible to develop an integration set of solutions by partnering with other companies, but the company has persisted in creating a series of solutions from scratch using their own technologies because they want to avoid a possible extinction of rights to use third party’s solutions in the automotive tech industry where mergers and acquisitions occur frequently.

trillium-securecan-integration-diagram

The automotive security market is valued at $3 billion but is expected to grow up to $20 billion by 2020 when connected cars will account for 75% of all vehicles shipped annually. According to Business Insider, there will be more than 220 million connected cars traveling on roads around the world as of that year. These predictions are probably enough for us to find out why we have recently seen a flurry of M&A and funding announcements in the automotive security industry, such as Cruise Automation acquired by GM for $1 billion, as well as Harman’s continuous acquisitions of RedBend Software ($170 million), St Symphony Teleca ($780 million) and TowerSec ($70 to 75 million).

Using the funds raised this time, Trillium will strengthen engineering efforts to complete solutions undergoing development like SecureLIN, SecureMOST and SecureFLEX, in addition to enhancing already-available solutions like SecureCAN and SecureETHER. The company claims that they want to start offering subscription-based security services including OTA program update function to connected-car users through car insurance companies, wireless data carriers, security providers and others by 2019.

Edited by “Tex” Pomeroy

Japan’s Infinity Venture Partners raises $20M from Taiwan government for its third fund

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See the original story in Japanese. Infinity Venture Partners (aka IVP), an investment fund focused on early-stage startups in Japan, China and Taiwan as well as elsewhere, announced today that it has secured an additional $25 million in funding for Infinity e.ventures Asia III, L.P. (“IVP third fund” for short), meaning that the funding raised has reached $75 million in total to date. Starting with $32 million back in November of 2014, the fund has now more than doubled from the original size; the aim now is to fundraise $100 million in total by the second half of 2016. Coinciding with this announcement, the firm unveiled that the total valuation of all three of its funds including the third fund is now valued at three times the initial funding amount. Limited partners, or simply investors, for the third fund include Recruit Holdings, Daiwa Securities, Sammy Networks, Orso, Mixi and United, in addition to other individual business owners of internet and mobile services in Japan and the rest of the world. Of the $25 million additional funding raised at this time, IVP told The Bridge that it has fundraised $20 million from Taiwan’s state-run National Development Fund, Executive Yuan (NDF). Aiming…

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See the original story in Japanese.

Infinity Venture Partners (aka IVP), an investment fund focused on early-stage startups in Japan, China and Taiwan as well as elsewhere, announced today that it has secured an additional $25 million in funding for Infinity e.ventures Asia III, L.P. (“IVP third fund” for short), meaning that the funding raised has reached $75 million in total to date. Starting with $32 million back in November of 2014, the fund has now more than doubled from the original size; the aim now is to fundraise $100 million in total by the second half of 2016. Coinciding with this announcement, the firm unveiled that the total valuation of all three of its funds including the third fund is now valued at three times the initial funding amount.

Limited partners, or simply investors, for the third fund include Recruit Holdings, Daiwa Securities, Sammy Networks, Orso, Mixi and United, in addition to other individual business owners of internet and mobile services in Japan and the rest of the world. Of the $25 million additional funding raised at this time, IVP told The Bridge that it has fundraised $20 million from Taiwan’s state-run National Development Fund, Executive Yuan (NDF).

Aiming to help Taiwanese startups grow internationally, NDF has invested in incubation and investment initiatives including 500 Startups, Taiwanese accelerator AppWorks, 360ip, Industry Technology Investment Corporation, among others.

IVP has been proactively supporting global expansion efforts of Taiwanese endeavors such as Pinkoi and KKBox, both of which are outstanding in terms of successful market entry into the Japanese market. The firm has an incubation space called TechTemple in three locations in China – Beixinqiao (Beijing), Sanlitun (Beijing) and Shenzhen – which may have encouraged the Taiwanese government to consider it as being relevant to helping Taiwanese startups expand into the Chinese market that many of them are likely to target.

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Edited by “Tex” Pomeroy

How up-and-coming Japanese FinTech/cloud startups are aiming at global market

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See the original story in Japanese. This article is part of our coverage of Microsoft Innovation Day in Tokyo. A couple of months ago, I had an opportunity to have four startup founders or executive members gather for a panel session held at Microsoft Japan’s office in Tokyo. To discuss topics rarely discussed at other places, I decided to feature startups that aim or have the potential to challenge the global market… this being one of The Bridge’s missions. Although we often hear the phrase ‘global startup’ it is not easy to create a service which is acceptable anywhere around the globe. This is not only because of differences in culture or languages, but because of the maturity of the market or needs from societies that vary by country (investors or entrepreneurs in English-speaking countries oftentimes express the requirement of some item for alleviation of ‘pain’ in society as a definition of startups). However, startups creating new concepts or values may be seen being likely to develop globally. As I invited a few candidates to consider such things, the discussion panel members unintentionally came to comprise fintech/near-fintech startup people. Since the values brought by these startups seem to be much…

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See the original story in Japanese.
This article is part of our coverage of Microsoft Innovation Day in Tokyo.

A couple of months ago, I had an opportunity to have four startup founders or executive members gather for a panel session held at Microsoft Japan’s office in Tokyo. To discuss topics rarely discussed at other places, I decided to feature startups that aim or have the potential to challenge the global market… this being one of The Bridge’s missions.

Although we often hear the phrase ‘global startup’ it is not easy to create a service which is acceptable anywhere around the globe. This is not only because of differences in culture or languages, but because of the maturity of the market or needs from societies that vary by country (investors or entrepreneurs in English-speaking countries oftentimes express the requirement of some item for alleviation of ‘pain’ in society as a definition of startups). However, startups creating new concepts or values may be seen being likely to develop globally.

As I invited a few candidates to consider such things, the discussion panel members unintentionally came to comprise fintech/near-fintech startup people. Since the values brought by these startups seem to be much needed anywhere in the world, they can be said to have a background acceptable to global companies or customers alone due to efforts upon localization.

I asked about their status thus far and their future strategies, and together mulled means of nurturing Japan into a global startup hub.

The entrepreneurs on the panel session were as follows:

  • Shirabe Ogino, CEO of Zaisan.net
  • Hiromitsu Kuwabara, CEO of Doreming Asia
  • Yuji Koizumi, COO of Knowledge Communication
  • Tomoya Kitayama, Head of Japan R&D, Alpaca db. Inc
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Shirabe Ogino, CEO of Zaisan.net

The mobile app named Kabuto Yohou provided by Zaisan.net informs one of economic news thought impacting stock prices. Once reported, economic analysts who participate in the app will vote on whether the news will impact stock prices or not. The votes are tallied in 30 minutes after reporting said to cause an effect on stock prices, and the vote results are fed back to users. The targeted users are day-traders monitoring stock prices closely. Although even experienced traders’ prediction accuracy for stock prices is said to be about 60%, the app succeeded in raising it to 81% by leveraging the aggregation of analysts’ knowledge.

Zaisan.net secured series A funding from Monex Ventures, Freebit Investment, and Waseda Investment in May, followed by launching an iOS app in Japan. About the possibility of overseas expansion CEO Ogino noted,

Since the service can be available in any country which has a stock market, we are going to consider possibilities for cooperation with overseas fintech companies or stock markets.

As part of this, he participated in the fintech conference Finovate held in San Jose earlier on in May.

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Hiromitsu Kuwabara, CEO of Doreming Asia

Fukuoka-based Doreming Asia’s mission is to reduce poverty and inequality in emerging countries. Although it is the poor who really require financial services for a stable life and security, not enough such services are provided in emerging countries. If low-income people with poor credit ratings can receive loans, the service plans will be limited to ones with annual interests of 100%, 300% or even 1,600% due to the high probability of these becoming irrecoverable.

Doreming Asia has developed a payroll system enabling calculation of the salary amount real-time before the closing date of companies. Counting the expected amount of work up to that time as security in return, workers can purchase products. The firm has a base in the co-working space called Rocket Space in San Francisco, as well as at Level39 fintech-focused accelerator in London.

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Yuji Koizumi, COO of Knowledge Communication

Knowledge Communication, established eight years ago, originated in providing a community website in the educational field for local cram schools. Since experiencing increases in user traffic especially during the examination season, the firm had introduced Amazon Web Service, which newly started its service in Japan at that time in 2011, into the community website and coincidentally entered the cloud integration business.

Recently, the firm has launched a cloud service named Knowledge-Com AI for easy utilization of AI (artificial intelligence) and Deep Learning. Knowledge-Com AI has shortened the algorithm selection time for machine learning to two weeks, which is one-fourth that of the conventional one, and realized automation of the process by a round-robin method of algorithms and parameters. The firm participated in MUFG FinTech accelerator 2016, and its six months’ outcome will be shown on Demo Day of the accelerator being held in August.

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Tomoya Kitayama, Head of Japan R&D, Alpaca db. Inc

Alpaca has been developing the trading platform Capitalico with Deep Learning, as introduced so far on The Bridge several times. According to Kitayama, only 5% of the entire trader base can generate profit with general investment trading. By adopting the power of science to trading, Capitalico aims to maximize the possibility of generating profit. User traders can turn their trading idea into an algorithm without any programming knowhow. Speeding up the process of the back test, it will implement a function to inform the best timing for trading to the users’ smartphone.

Among the four firms introduced above, Alpaca may be most likely to show a movement toward global expansion. The firm started its business in Japan originally, but has been headquartered in Silicon Valley where CEO Yoshi Yokogawa and CTO Hitoshi Harada engage in daily operations.

‘Corporate Strength’ that matches global needs

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CEO of Zaisan.net Ogino called himself originally as a ‘man of IT, not of finance’ in referring to his work history, having been and engaged in business development department of Itochu Technology Ventures and Gree. He had been interested in bringing knowledge of people who’d been activated by the Internet into the financial field. In this field, a profitable service may be realized only with about 10,000 users due to the great volume of money entailed in transactions, unlike the game or some such field. The app Kabuto Yohou does not charge users, but monetizes by bringing users to stock brokerage firms.

On the other hand, Doreming Asia is a startup spun off from Kizuna Japan which has been developing HR (human resource) system which supports attendance management and payroll for 20 years. No capital relations exist between them, so Doreming Asia can be called a pure startup. The advantage of Doreming Asia is its solution based on knowledge which Kizuna Japan has cultivated for the past two decades.

According to CEO Kuwabara, when he showcased the product at TechCrunch Disrupt SF 2015, people from accounting firms in the US were simply astounded by the real-time payroll system according to task or man-hours. Since it is common in the United States to outsource payrolling, the function linkable to accounting and banking system was highly evaluated.

Knowledge Communication finds values in absorbing and retaining the latest technologies, then availing them to customers. As technologies are commoditizing very quickly, the firm makes returns to users through fast API developments and provision. To maintain technological levels and employee motivation, its technology team three years ago started a tech blog called ‘Knowledge-Com AWS recipe’ wherein the team investigates, arranges and distributes information about technologies on a sustained basis.

Head of Japan R&D, Alpaca db. Inc Kitayama, highlights Alpaca’s advantages:

Especially in the service field we are dealing with, performance results are recognized in figures. The competition in our field is just like ‘who is the first one to climb Mt. Everest (as top player in the field),’ so basic skills are strongly mandated.

Co-founder / CTO Harada is a professional as to Pivotal and a major contributor to PostgreSQL. In addition, Greenplum CTO Luke Lonergan, who is also known as a ‘speedster’ in the database field, works as an advisor for Alpaca. Thanks to luck and connections such brilliant talents came to be brought together.

He is convinced of success in a straightforward manner with these members. By being the top players, sometimes talents who had formerly worked at other startups contact when making a comeback and seeking their next job. From such a viewpoint, staying at the leading edge of technology is important when hiring excellent human resources.

How expanding globally?

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Zaisan.net is seeking Chinese analysts upon looking toward the Chinese market. Also it plans to establish a joint venture with an overseas fintech company in any country within this year. The targeted countries including the US, UK and possibly France, Germany, Australia and China.

Doreming Asia explains the reason for headquartering in the US; its investment amount into intellectual property rights is quite larger, and there are many payment settlement companies. Also as mentioned above, it makes active use of its UK base because of businesses related to refugees and the preferential tax system, in addition to the four megabanks positioned closer to startups.

Knowledge Communication has located its development base at Japan’s western city of Kumamoto now, but is considering overseas development in the future. Already performing business by connecting Kumamoto and Tokyo closely, one day the firm may come to hire international engineers and realize a workstyle not influenced by location.

Alpaca emphasizes that it aims to grow in harmony with the world while using Japan’s advantages. Although it was natural to set headquarters in Silicon Valley due to the premised global competition, the reason for not leaving Tokyo office is accessibility to Japanese financial institutions with a huge market and the capture of excellent engineers.

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We often hear an expression that ‘global’ is a general term for aggregation of locals. Various conditions differ by countries and places: market environment around clients and users for service, existence of investors for fundraising and hiring conditions of engineers for development. When building up a global startup, it is vital to gather knowledge of the global startups scenes.

We hope that our gathering much information using The Bridge will help support startups, imaging an international future upon threshing out global strategies.

How Japanese energy startup Wassha delivers prepaid solar power to rural Africa

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See the original story in Japanese. Updated on Nov. 8, 2019: Wassha told The Bridge that they positioned the funding up to the date when this article was published as an series A extension round instead of a series A round. Some words were modified accordingly. The percentage of households owning a landline phone once used to be considered the measure of industrialization for that country. Some decades ago, the ownership rate of the landline phone in China was much lower than that in Japan. However, as mobile devices were developed and smartphones appeared around the world, the ownership rate of smartphones in Chinese urban areas has exceeded 100% (it comes to more than one smartphone per person), which is twice as much as in Japan. In several years from now, tourists to China probably would not need credit cards nor to exchange currencies at the airport, but would be able to settle all bills using mobile devices while traveling. This example indicates that countries with well-developed infrastructures are apt to be influenced by old infrastructures when some new system has appeared, but it is rather quicker for undeveloped areas to adopt to the new system. Although Japan looked better…

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CC BY-SA 2.0: Via Flickr by Ian Muttoo

See the original story in Japanese.

Updated on Nov. 8, 2019: Wassha told The Bridge that they positioned the funding up to the date when this article was published as an series A extension round instead of a series A round. Some words were modified accordingly.

The percentage of households owning a landline phone once used to be considered the measure of industrialization for that country. Some decades ago, the ownership rate of the landline phone in China was much lower than that in Japan. However, as mobile devices were developed and smartphones appeared around the world, the ownership rate of smartphones in Chinese urban areas has exceeded 100% (it comes to more than one smartphone per person), which is twice as much as in Japan. In several years from now, tourists to China probably would not need credit cards nor to exchange currencies at the airport, but would be able to settle all bills using mobile devices while traveling.

This example indicates that countries with well-developed infrastructures are apt to be influenced by old infrastructures when some new system has appeared, but it is rather quicker for undeveloped areas to adopt to the new system. Although Japan looked better in information infrastructure than China, the appearance of the mobile system which does not need telephone lines to be set up has changed the order in both countries.

And now, a revolution is about to break out in the electric power industry. The disruption is being wrought by Japanese startup Digital Grid.

Increasing demand for power in Africa

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Image credit: Digital Grid

The world’s population marked 7.3 billion as of 2016, and 1.2 billion people among them are living without electricity, whether they like it or not. Among 900 million people living in Africa, 6.3 million people cannot even access electric power. This is due to poor cost-effectiveness of power grid development resulting from the low population density. On the other hand, the ownership rate of mobile phones of 50% across the entire African continent is unexpectedly high; almost every adult male owns a mobile phone, though the ownership ratio may differ according to local area. They go to shops located a few kilometers away from their own home that avail power equipment, where the mobile phones can be recharged almost everyday. Such scenes may be unimaginable in advanced countries where power is available with a touch of a button, but that is many Africans’ everyday life.

As for illumination at night in such areas, kerosene lamps are mostly used. Since these lamps oftentimes generate soot from low-quality fuel, leading to respiratory illnesses, thus ranking in as a global social problem. According to World Bank’s survey, it is estimated that women or children living in these area inhale kerosene lamp soot indoors equaling smoke from as much as 40 cigarettes daily. In addition, there are many people who suffer from serious burns due to overturned lamps.

See also:

Digital Grid aims to solve these social problems through its service Wassha, which networks small-sized kiosks (or should they be referred to as jacks-of-all-trade) found in all African villages.

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Digital Grid CEO Satoshi Akita and marketing staff of Wassha in Tanzania

Digital Grid installs solar panels or battery units in the kiosks, and provides 30 LED lanterns, radios or tablets for rental. The kiosk owners rent these out as home electrical appliances to villagers and charges them for charging power at the kiosks. The owners settle the electricity bills from smartphones and energize charging boxes for the appliances, even collecting from each kiosk through use of mobiles. The kiosk’s income is 16% of electricity sales, and average monthly income per kiosk is about 20,000 yen (about $188).

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L to R: CEO Satoshi Akita, CFO Atsuhi Shito

CEO of Digital Grid Satoshi Akita explains Wassha:

If we opened retail outlets ourselves, management would be difficult because we don’t know who the trustworthy customers are. However, such matters will not occur by joining hands with existing kiosks in villages because they know each others well. Also, retailer network expansion can take place much faster.

Digital Grid has already expanded the service to 650 kiosks in Tanzania during the first half of this year. It plans to increase the number of user kiosks to 1,700 within the year, to reach one million end-users. It has participated in the Spring 2016 Season batch of Orange Fab Asia, and intends to develop service in west Africa including Senegal through support from Orange, the carrier providing telephony or mobile settlement service in such African countries.

Extension of powered area coverage as a virtual ‘surface’ can be realized without placing lines like those of the power grid, but rather through networking of kiosks with solar panels posited as ‘dots.’

No regulation for power business in Africa

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Image credit: Digital Grid

Digital Grid had originally spun off from a research effort on ‘power network innovation (digital grid)’ by Prof. Rikiya Abe of the University of Tokyo. The concept of a digital grid is similar to the process in which the voice communication method using telephones has changed from landline to the mobile network or VoIP (Voice over IP), for example. As deregulation of electric power has commenced in Japan, ordinary households can now purchase electricity from any electric power utility, just by setting up smart meters.

Beyond the deregulation of electricity can be found the Smart Grid and beyond that, the digital grid. Over the digital grid, a device called the digital grid router – which is just like the router for packet switching in data communication – is used, providing for intelligent routing between power suppliers and consumers.

Demonstration tests will be needed before the digital grid is realized, but there are many constraining conditions upon the testing of new technologies in advanced countries, where a stable power supply is mandated. So it is that Wassha had found its way to Africa, burdened with poor power supply. Although today’s Wassha contains little of the original digital grid concept, we cannot rule out the possibility that the disruption in the mobile communication field may parallel that in the power supply field when Wassha plays comes to play a central role on the African continent, as mentioned in the introduction.

Wassha not only supplies power but changes lifestyles

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Image credit: Digital Grid

Since its launch back in 2013, Digital Grid has fundraised a total of 900 million yen (about $8.6 million) 800 million yen (about $7.6 million) from The University of Tokyo Edge Capital (UTEC), Development Bank of Japan, Innovative Venture Fund (jointly operated by NEC group and SMBC group) and J-Power, and has already closed its series B round series A extension round. With recommendation by UTEC, the team is going to participate in Stanford University’s accelerator program StartX as the first startup from Japan.

In addition to the power supply business, Digital Grid is thinking to develop various other businesses, such as remote healthcare, telemedicine, test marketing, financing, remote education or cold supply chain at kiosk shops by leveraging its network. It will showcase its service at Viva Technology Startup Connect being held from June 30 to July 2 in Paris, so please check it out if you are interested.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy

Japan’s Quoine secures $16M series B to become Asia’s largest bitcoin exchange of exchanges

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See the original story in Japanese. Tokyo- / Singapore-based Quoine, the startup offering a bitcoin exchange and other cryptocurrency-related services, announced today that it has secured a total of $16 million in a series B round. Following a series A round when the company raised $2 million from several angel investors back in December of 2014, this round was led by Japanese investment company Jafco (TSE:8595) with participation from an unnamed VC firm and several unnamed businesses. Since this round is not closed yet, the company said that it may additionally raise up to $4 million from potential business partners. The latest funding was obviously swayed by the perspective that the demand for bitcoin will grow exponentially upon Japanese parliament’s recent enactment of a bill for regulating cryptocurrency exchanges. While Mario Gomez-Lozada, who had been formerly served as CEO since the launch of Quoine, later became CTO to focus on system development, and the company named co-founder Kariya Kayamori as a new CEO earlier this year. Prior to launching Quoine, Kayamori had been involved in developing businesses at Japanese leading companies like Softbank and Mitsubishi Corporation. In addition, the company has changed its structure between their Singaporean and Japanese business…

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See the original story in Japanese.

Tokyo- / Singapore-based Quoine, the startup offering a bitcoin exchange and other cryptocurrency-related services, announced today that it has secured a total of $16 million in a series B round. Following a series A round when the company raised $2 million from several angel investors back in December of 2014, this round was led by Japanese investment company Jafco (TSE:8595) with participation from an unnamed VC firm and several unnamed businesses. Since this round is not closed yet, the company said that it may additionally raise up to $4 million from potential business partners.

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Quoine CEO Kariya Kayamori

The latest funding was obviously swayed by the perspective that the demand for bitcoin will grow exponentially upon Japanese parliament’s recent enactment of a bill for regulating cryptocurrency exchanges. While Mario Gomez-Lozada, who had been formerly served as CEO since the launch of Quoine, later became CTO to focus on system development, and the company named co-founder Kariya Kayamori as a new CEO earlier this year. Prior to launching Quoine, Kayamori had been involved in developing businesses at Japanese leading companies like Softbank and Mitsubishi Corporation. In addition, the company has changed its structure between their Singaporean and Japanese business entities where the Japanese company has now become the parent of its subsidiary in Singapore while the Singaporean entity used to be the parent to the Japanese one.

According to cryptocurrency portal Coinhills’ real-time ranking of global bitcoin exchanges in volume of transactions, Quoine is ranked in 7th place following Chinese six exchanges in a craze of speculation. This list obviously indicates Quoine being Japan’s largest bitcoin exchange followed by BtcBox and bitFlyer as well as one of the world’s leading bitcoin exchanges. Given that the annual amount of foreign-exchange(FX) trading in Japan has reached about $50 trillion, Kayamori predicts about 10% of these transactions being replaced by cryptocurrencies in the future. Quoine transacts bitcoins worth of $50 million a day, but he thinks it will be able to expand up to 100 times that of today.

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The world’s top 10 bitcoin exchanges (as of 11am, June 20, 2016)
Image credit: Coinhills

But here the question of how and why did Quoine become ranked high in the transaction amount despite the fact that the company is not so famous among bitcoin exchanges in Japan may come to mind. The answer is their B2B2C(business-to-business-to-commerce)-focused business model where Quoine is offering backend engines for several other acting and upcoming bitcoin exchanges.

In Japan, many Internet service providers and online portal sites are offering online brokerage services for stock and FX tradings. However, due to cost efficiency as well as the need to secure the robustness and stability a typical financial platforms requires, many of them adopted systems from other online securities companies and such. Similar circumstances will be likely to happen in the bitcoin exchange industry as well, so Quoine wants to win these needs. Citing Kayamori’s words,

It’s an exchange of cryptocurrency exchanges, let’s say, we want to be somewhat like the cryptocurrency version of Tokyo Stock Exchange.

Quoine established a bitcoin exchange in Indonesia in October of 2014 in partnership with that country’s largest payments processor Indomog, while also expanding into other Asian markets. Their future focus is on Japan and Asia as well. The company claims that they want to be Asia’s largest cryptocurrency exchange by partnering with local cryptocurrency exchanges and other service providers holding many of the potential cryptocurrency users in the region.

Edited by “Tex” Pomeroy

Japanese flea market app Maipple gets seed funding to boost user growth in Taiwan

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See the original story in Japanese. Tokyo- / Taipei-based Maipple, the startup offering a fashion-focused flea market app in Taiwan under the same name, announced today that it has secured seed round funding from GX Incubate and three angel investors. GX Incubate is a fully-owned subsidiary of Japanese Internet company Gaiax (TSE:3775) and runs its fund focused on investing in sharing economy businesses. Financial details of the deal and the names of participating angel investors have not been disclosed. Maipple was born out of the 11th batch of Taiwanese startup accelerator AppWorks. Launched in December, the app has been focused on dealing with consumer-to-consumer (C2C) transactions of fashion items in Taiwan. For payments between sellers and buyers, Maipple offers an escrow service, standing in the middle of both parties while the buyers are allowed to complete a payment by credit card, convenience store payment or bank remittance. Due to a time-limited offer upon launch of the app, no commission for escrow payments is required for now. For an item delivery, sellers can present several options from door-to-door delivery, the Taiwanese postal service and delivery to the buyer’s nearest convenience store. As for C2C services in Taiwan, there have been online…

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See the original story in Japanese.

Tokyo- / Taipei-based Maipple, the startup offering a fashion-focused flea market app in Taiwan under the same name, announced today that it has secured seed round funding from GX Incubate and three angel investors. GX Incubate is a fully-owned subsidiary of Japanese Internet company Gaiax (TSE:3775) and runs its fund focused on investing in sharing economy businesses. Financial details of the deal and the names of participating angel investors have not been disclosed.

Maipple was born out of the 11th batch of Taiwanese startup accelerator AppWorks. Launched in December, the app has been focused on dealing with consumer-to-consumer (C2C) transactions of fashion items in Taiwan. For payments between sellers and buyers, Maipple offers an escrow service, standing in the middle of both parties while the buyers are allowed to complete a payment by credit card, convenience store payment or bank remittance.

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Due to a time-limited offer upon launch of the app, no commission for escrow payments is required for now. For an item delivery, sellers can present several options from door-to-door delivery, the Taiwanese postal service and delivery to the buyer’s nearest convenience store. As for C2C services in Taiwan, there have been online auction sites like Yahoo Taiwan Auction and Ruten Auction backed by PCHome and eBay but Maipple claims that it is the first flea market app focused on selling and buying fashion items in Taiwan.

Given that the app can complete deals in a mobile environment, it reminds us of Mercari which has successfully seized many customers from Yahoo Japan Auction. Kotaro Nagamatsu, founder and CEO of Maipple, explained that he wants to boost promotion of the service leveraging over 300 women influencers which his company has acquired through the experience, helping Japanese apparel makers to market their brands in the Taiwanese market.

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Some of incluencers helping Maipple’s marketing effort in Taiwan.

The funds raised this time are to be used for promotional activities, enhanced system development and further expansion to other Southeast Asian markets. While Maipple will be focused on C2C deals for the time being, they want to expand to a B2C (business-to-consumer) business by helping Japanese fashion brands sell carry-over stock in Taiwan.

As a competitor in this region, Japanese startup Smaoku has recently introduced a mobile app that allows Japanese users to sell their secondhand brand items to buyers in Asian countries. For Southeast Asia, where Maipple plans to expand into from now on, there’s also other competitors such as Carousell. It will be interesting to see how the company can create a hype in user growth by leveraging the ‘Japan brand.’

Edited by “Tex” Pomeroy

Japanese IoT-focused MVNO Soracom snags additional $5.8M funding for series B round

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This is the abridged version from our original article in Japanese. Japan’s MVNO (mobile virtual network operator) Soracom, which offers mobile data communication over its platform, announced today that it has fundraised about 600 million yen (about $5.8 million) from Pavilion Capital, the private equity fund of Singapore’s state-backed Temasek Holdings. Coinciding with this funding, the company announced that it will set up a local subsidiary called Soracom International in Singapore. In partnership with Mitsui & Co., which participated in the previous $22 million series B funding round, Soracom is ready now to boost its global expansion efforts. The Internet of Things(IoT)-focused MVNO will start this thrust from the Asian market. See also: Japan’s Soracom launches cellular network service for Internet of Things developers Translated by Masaru Ikeda Edited b “Tex” Pomeroy

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This is the abridged version from our original article in Japanese.

Japan’s MVNO (mobile virtual network operator) Soracom, which offers mobile data communication over its platform, announced today that it has fundraised about 600 million yen (about $5.8 million) from Pavilion Capital, the private equity fund of Singapore’s state-backed Temasek Holdings.

Coinciding with this funding, the company announced that it will set up a local subsidiary called Soracom International in Singapore. In partnership with Mitsui & Co., which participated in the previous $22 million series B funding round, Soracom is ready now to boost its global expansion efforts. The Internet of Things(IoT)-focused MVNO will start this thrust from the Asian market.

See also:

Translated by Masaru Ikeda
Edited b “Tex” Pomeroy

Japan’s software network virtualization startup Midokura secures $20M series B

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This is the abridged version from our original article in Japanese. Midokura Holdings Ltd., the company offering a software network virtualization technology, announced today that it has fundraised $20 million in a series B round. This round was led by Innovation Network Corporation of Japan (INCJ for Short) with participation from Simplex and Allen Miner. Simplex provides major Japanese banks with dealing systems while Allen Miner is chairman of Japanese VC firm Sunbridge Global Ventures who is also formerly Oracle Japan CEO. With the funding this time, the company has raised $44 million in total to date. Midokura has not disclosed any financial details including valuation, shareholdings ratio and payment date upon fundraising. But the company claims that they will enhance development of Midokura Enterprise MidoNet (MEM) and new product line-ups as well as empowering their management and development teams. Since its launch back in 2010, the company’s been led by Tatsuya Kato, chairman of the board and co-founder, who is a veteran entrepreneur also renowned for having served Japanese investment fund Globis as COO. Prior to launching Midokura, he was involved in managing notable Japanese IT companies such as Cybird (TSE:4823) and CSK Holdings (TSE:9737). Headquartered in Lausanne, Switzerland,…

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The Midokura team comprises 60 employees across six countries around the world

This is the abridged version from our original article in Japanese.

Midokura Holdings Ltd., the company offering a software network virtualization technology, announced today that it has fundraised $20 million in a series B round. This round was led by Innovation Network Corporation of Japan (INCJ for Short) with participation from Simplex and Allen Miner. Simplex provides major Japanese banks with dealing systems while Allen Miner is chairman of Japanese VC firm Sunbridge Global Ventures who is also formerly Oracle Japan CEO. With the funding this time, the company has raised $44 million in total to date.

Midokura has not disclosed any financial details including valuation, shareholdings ratio and payment date upon fundraising. But the company claims that they will enhance development of Midokura Enterprise MidoNet (MEM) and new product line-ups as well as empowering their management and development teams.

Since its launch back in 2010, the company’s been led by Tatsuya Kato, chairman of the board and co-founder, who is a veteran entrepreneur also renowned for having served Japanese investment fund Globis as COO. Prior to launching Midokura, he was involved in managing notable Japanese IT companies such as Cybird (TSE:4823) and CSK Holdings (TSE:9737).

Headquartered in Lausanne, Switzerland, Midokura runs its business operations at six different locations worldwide, though substantial headquarter operations is found in Tokyo. According to Kato who is based out of Tokyo, their system development team is based out of Barcelona, Spain while the San Francisco team is in charge of marketing operations.

The company has been developing MEM, a software network virtualization technology which replaces hardware network devices with a series of software, enabling service providers to reduce installation and maintenance costs for network environment.

Translated by Masaru Ikeda
Edited by “Tex” Pomeroy

ST Booking gains $200K in seed funding to bring more students from Asia to Japan

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See the original story in Japanese. Tokyo- / Taipei-based ST Booking (previously known as Hakodate Ventures), the startup offering an education services marketplace under the same name, announced today that it has fundraised $200,000 in a seed round from several investors including Singapore-based Beenext and Tokyo-based IF Angel. ST Booking was founded in September 2015 by Shota James Morikawa, a former associate at East Ventures as well as a former director at Japanese startup Hyper8. In addition to Morikawa as CEO, Tiffany Wu, vice president at Taiwanese angel/seed fund Pinehurst Advisors, and Mark Hsu, co-founder of Pinehurst, joined the company as founding members. ST Booking is a matching platform for connecting Southeast Asian students wishing to study abroad to Japanese educational institutions. Tying up with 60 language schools or business colleges in Japan, and more than 1,100 agencies in Taiwan, Thailand or Vietnam, ST Booking approaches with both B2B via agencies and B2C by directly acquiring students. The recent Japanese government effort to attract 300,000 international students a year by 2020 is having a positive impact on the service. It monetizes with a “results reward” model; educational institutions will be charged 15 to 25% commission of the school fees. In…

stbooking_screenshot

See the original story in Japanese.

Tokyo- / Taipei-based ST Booking (previously known as Hakodate Ventures), the startup offering an education services marketplace under the same name, announced today that it has fundraised $200,000 in a seed round from several investors including Singapore-based Beenext and Tokyo-based IF Angel.

ST Booking was founded in September 2015 by Shota James Morikawa, a former associate at East Ventures as well as a former director at Japanese startup Hyper8. In addition to Morikawa as CEO, Tiffany Wu, vice president at Taiwanese angel/seed fund Pinehurst Advisors, and Mark Hsu, co-founder of Pinehurst, joined the company as founding members.

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Shota James Morikawa delivered his pitch at B Dash Camp 2016 Spring in Fukuoka in March 2016. (Image credit: ST Booking)

ST Booking is a matching platform for connecting Southeast Asian students wishing to study abroad to Japanese educational institutions. Tying up with 60 language schools or business colleges in Japan, and more than 1,100 agencies in Taiwan, Thailand or Vietnam, ST Booking approaches with both B2B via agencies and B2C by directly acquiring students.

The recent Japanese government effort to attract 300,000 international students a year by 2020 is having a positive impact on the service. It monetizes with a “results reward” model; educational institutions will be charged 15 to 25% commission of the school fees. In the future, it aims to develop a CRM to optimize sponsorship relations with companies for employment after graduation or the study abroad processes.

Mark Hsu, one of the aforementioned founding members, is known as an investor in startups but also has been running a business called Envision Recruit, helping educational institutions market their services in Taiwan and other countries. His vast network and deep experience in this sector will be greatly beneficial to operating the ST Booking business. Furthermore, thanks to the Vietnamese educational ministry’s decision adding Japanese as the first foreign language to learn at elementary schools, the local rush to study Japanese is on a rise. While Singapore-incorporated ST Booking has offices in Tokyo and Taiwan, their team members appear to be busy traveling around the entire Southeast Asian region for sales and marketing.

ST Booking aims to use the fund to launch new services, increase brand awareness and enhance network building with more agencies in the region.

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The ST Booking team members discuss with each other at an office in Vietnam. CEO Morikawa sits in the middle while co-founder Hsu stands on the left. Image credit: ST Booking

Edited by “Tex” Pomeroy

Japan’s cloud-based logistics platform OpenLogi gets $1.9M for Asian expansion

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See the original story in Japanese. Various instant e-commerce platforms or consumer-to-consumer (C2C) trading platforms, which an individual can readily make use of, have been started up in recent years. This active situation can be recognized from the growth of players in this field such as Mercari, Base, and Store.jp. As trading of “things” occurs, logistics become necessary. Others seem to be growing with this flow as well. Tokyo-based OpenLogi, which provides an outsourced logistics platform, announced on Tuesday that it has fundraised 210 million yen (about $1.9 million) from IMJ Investment Partners (IMJ-IP), SMBC Venture Capital and Infinity Ventures LLP. Coinciding with the funding, partner of IMJ-IP Hiroshi Oka has been appointed as an outside director. This fund will be spent for enhancing human resources. According to OpenLogi CEO Hidetsugu Ito, the firm plans to increase the number of members up to about 25 from the current 15 (including 9 engineers). Concurrently it promotes business development overseas such as in Southeast Asia, also in cooperation with IMJ-IP. I covered OpenLogi for the first time just a year ago. Please check out the previous article about their “optimization of warehouses and logistics business.” Ito explains that the firm has been…

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OpenLogi website

See the original story in Japanese.

Various instant e-commerce platforms or consumer-to-consumer (C2C) trading platforms, which an individual can readily make use of, have been started up in recent years. This active situation can be recognized from the growth of players in this field such as Mercari, Base, and Store.jp.

As trading of “things” occurs, logistics become necessary. Others seem to be growing with this flow as well.

Tokyo-based OpenLogi, which provides an outsourced logistics platform, announced on Tuesday that it has fundraised 210 million yen (about $1.9 million) from IMJ Investment Partners (IMJ-IP), SMBC Venture Capital and Infinity Ventures LLP. Coinciding with the funding, partner of IMJ-IP Hiroshi Oka has been appointed as an outside director.

This fund will be spent for enhancing human resources. According to OpenLogi CEO Hidetsugu Ito, the firm plans to increase the number of members up to about 25 from the current 15 (including 9 engineers). Concurrently it promotes business development overseas such as in Southeast Asia, also in cooperation with IMJ-IP.

I covered OpenLogi for the first time just a year ago. Please check out the previous article about their “optimization of warehouses and logistics business.”

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OpenLogi CEO Hidetsugu Ito  (Image credit: OpenLogi)

Ito explains that the firm has been focusing in particular on the optimization of its warehouse control system for a year. Since many of the contracted warehouses are located in the Tokorozawa area (suburban Tokyo), the firm moved its office to Ikebukuro (transit hub to the Tokorozawa are) and sometimes has a meeting with the developer team even at a warehouse.

Over the past year, the firm has tackled “improvement of efficiency of warehouse work.”

To ship and stock goods in warehouses via OpenLogi, users only have to ask transportation companies to carry them after member registration on the website. As a result, some of the users send out goods without care.

Ito explains:

For example, when a user sends three goods of A, B, and C, he / she inputs information about the goods to OpenLogi’s system in advance, but sometimes differences between the arrived goods and the inputted contents can be seen. Although we had handled these cases through confirmation with chat tools so far, we have enabled warehouse operators to communicate directly with users only by receiving photos taken with iPad.

As reported previously, each warehouse has a unique work method or style. To optimize all of them by considering it as one large warehouse virtually, standardization of warehouse work is needed.

Ito mentioned the difficulties in standardization:

The standardization of warehouse work was not easy. For example, one warehouse operator requires photos of goods, while another requires clothes to be folded. We classified requests from warehouse operators into patterns, and we advanced standardization in the system side.

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Image credit: OpenLogi

The firm contracts with several warehouse bases as of now, acquiring one company each month. As for the charging system, conventional uniform charge was tuned to be variable according to the number of shipment or work quantity.

Most of players, intending to bring forth a new business phase by making conventional business move online, generally starts from optimization of the business practices or operation in that field by leveraging technologies, as seen in laundry or printing industry. OpenLogi seems to have completed that phase as well, and is entering to the expansion phase. We will continue to follow their future growth.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy