THE BRIDGE

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Two young Japanese entrepreneurs discuss their recent buyouts

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See the original story in Japanese. This is a part of our coverage of B Dash Camp Osaka 2013. Two Japanese startups that have experienced an strong growth in the last several months are Coach United, the startup behind private lesson portal Cyta.jp, and Bracket, which operates instant e-commerce platform STORES.jp. On day two of B Dash Camp Osaka last week, we had a chance to hear from Coach United CEO Nobuhiro Ariyasu and Bracket CEO Yusuke Mitsumoto. Also on the panel were Rakuten executive officer Takeshi Homma, and KDDI general manager Shigeki Matsuno. This year Ariyasu sold his startup to Japanese recipe site Cookpad, and Mitsumoto sold his startup to leading Japanese fashion commerce company Start Today. Moderator Hiroyuki Watanabe started the sessions with asking about their recent exits. When did you start preparing for buyouts? Ariyasu explained: When we launched our company back in 2007, I had no idea about funding or M&As. We couldn’t help but enjoy developing our product at that time. Two or three years later, we finally could make our business profitable, and had a chance to receive offers from some people [1]. The company kept using bank loans but were exploring funding opportunities…

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Bracket CEO Yusuke Mitsumoto and Coach United CEO Nobuhiro Ariyasu

See the original story in Japanese.

This is a part of our coverage of B Dash Camp Osaka 2013.

Two Japanese startups that have experienced an strong growth in the last several months are Coach United, the startup behind private lesson portal Cyta.jp, and Bracket, which operates instant e-commerce platform STORES.jp. On day two of B Dash Camp Osaka last week, we had a chance to hear from Coach United CEO Nobuhiro Ariyasu and Bracket CEO Yusuke Mitsumoto. Also on the panel were Rakuten executive officer Takeshi Homma, and KDDI general manager Shigeki Matsuno.

This year Ariyasu sold his startup to Japanese recipe site Cookpad, and Mitsumoto sold his startup to leading Japanese fashion commerce company Start Today. Moderator Hiroyuki Watanabe started the sessions with asking about their recent exits.

When did you start preparing for buyouts?

Ariyasu explained:

When we launched our company back in 2007, I had no idea about funding or M&As. We couldn’t help but enjoy developing our product at that time. Two or three years later, we finally could make our business profitable, and had a chance to receive offers from some people [1].

The company kept using bank loans but were exploring funding opportunities for the next stretch.

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Bracket is not an old company but has been running a number of businesses for about five years. In contrast to his past businesses, Mitsumoto was aggressively exploring funding opportunities to boost their e-commerce platform. He attributes this to the many competitors in that space [2].

What’s the most impressed in the entire session was the following interaction between the pair.

Ariyasu asked Mitsumoto,

If Base (Bracket’s main competitor) wasn’t around, would you still sell your startup to Startup Today?

Mitsumoto answered, saying:

Without them, we probably might have not achieved the revenue we have.

Why not aim for an IPO?

Since these two startups were rapidly growing but self-funded, their founders could probably consider IPOs as possible options. But they emphasized a good match with the companies that acquired them.

Ariyasu explains:

I’m not really a person who drives after an IPO. It’s all up to you to determine whether an IPO and an M&A is a better choice for you. … I actually got an offer from Murakami (Livesense CEO) but I think it was not so aggressive. I’m close with him, and we have been fishing together. The reason why we partnered with Cookpad was I thought the both companies have something common in their corporate culture.

In a explanation about how Bracket’s Mitsumoto decided to sell his startup, he unveiled it was finally decided over the phone with Start Today’s CEO Yusaku Maezawa, which surprised the audience.

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Bracket CEO Yusuke Mitsumoto

The decision was surprisingly smooth. I’ve been in touch with Maezawa for almost three years since he sent us an inquiry via our website. I’ve handled four different businesses in the past, and I finally managed to find success in my fifth. The recent announcement that Yahoo Japan made of making its e-commerce platform free this year will be a big turning point in the Japanese e-commerce industry, where more players will make more bold decisions to defeat competitors.

Buyer’s perspective, seller’s perspective

KDDI’s Matsuno was involved in Mediba’s [3] acquisitions of startups such as Nobot and Scaleout. In a response to moderator Watanabe’s question about criteria around M&As, he says:

You probably need the perspectives of both a buyer and a seller. When your company is acquired by 100%, you will totally lose your ownership. In an extreme case, you might lose your position as the CEO. When you think of a company that you could sell your business to, you will need to build a good relationship of mutual trust (not to be asked to step down).

Rakuten’s Homma concluded the session with saying that:

Both for a seller and a buyer, the more experience you have, the better you can understand how you should proceed.


  1. We previously featured Ariyasu and Cyta in this article.
  2. Our readers may recall that we visited the Bracket office just last month, and had a chance to speak more with Mitsumoto about Stores.jp.)
  3. Mediba is a mobile advertising-focused subsidiary of KDDI.

Japanese recipe sharing site Cookpad acquires private lesson marketplace Cyta.jp for $10 million

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See the original story in Japanese. Tokyo-based Coach United, the startup behind private lesson marketplace Cyta.jp, announced today that it has been acquired by Japanese recipe sharing site Cookpad. Update: Several news sources say the acquisition price is 1 billion yen ($10 million). Since its launch back in June of 2011, it has grown to provide users with about 140 different private lessons (in fields such as language learning, music study, or qualification acquisition), available at 3,000 locations around the country. Unlike other marketplace services which typically connect potential students to teachers, the startup assures the quality of the lessons they introduce on the website by checking into will teach them or where it will take place. In our past interview with the startup’s CEO Nobuhiro Ariyasu, the company expected to have 20,000 users received private lessons (as of August). Prior to the acquisition, the two companies have worked with each other on some test marketing initiatives back in late 2012.

cyta-cookpad

See the original story in Japanese.

Tokyo-based Coach United, the startup behind private lesson marketplace Cyta.jp, announced today that it has been acquired by Japanese recipe sharing site Cookpad.

Update: Several news sources say the acquisition price is 1 billion yen ($10 million).

Since its launch back in June of 2011, it has grown to provide users with about 140 different private lessons (in fields such as language learning, music study, or qualification acquisition), available at 3,000 locations around the country. Unlike other marketplace services which typically connect potential students to teachers, the startup assures the quality of the lessons they introduce on the website by checking into will teach them or where it will take place.

In our past interview with the startup’s CEO Nobuhiro Ariyasu, the company expected to have 20,000 users received private lessons (as of August).

Prior to the acquisition, the two companies have worked with each other on some test marketing initiatives back in late 2012.

Can a small Japanese startup ride the smartphone wave to e-commerce success?

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See the original story in Japanese. Thanks to the progress that companies like Rakuten and Amazon have made in the e-commerce market, we can now easily purchase quality items for better prices online. But in Japan, the online retail market still accounts for less than 10% of the nation’s overall retail market, which means there’s still lots of potential for further growth. One player out there is hoping to disrupt the Japanese market from a unique angle. Coach United is the Tokyo-based startup behind Cyta.jp, one of Japan’s leading marketplaces focused on private lessons. According to CEO Nobuhiro Ariyasu, their newly launched smartphone-optimized interface will be a turning point for the company, capitalizing on Japan’s increasing affinity for all things mobile. They plan to create a new kind of business where instead of selling just products online, they focus on ‘service e-commerce’. Cyta.jp provides users with information about 140 different private lessons (such as language learning, music study, or qualification acquisition) which are available at 3,000 locations around the country. Unlike other marketplace services which typically connect potential students to lesson teachers, the startup assures the quality of the lessons they introduce on the website by checking into who will…

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Coach United’s CEO Nobuhiro Ariyasu

See the original story in Japanese.

Thanks to the progress that companies like Rakuten and Amazon have made in the e-commerce market, we can now easily purchase quality items for better prices online. But in Japan, the online retail market still accounts for less than 10% of the nation’s overall retail market, which means there’s still lots of potential for further growth.

One player out there is hoping to disrupt the Japanese market from a unique angle. Coach United is the Tokyo-based startup behind Cyta.jp, one of Japan’s leading marketplaces focused on private lessons. According to CEO Nobuhiro Ariyasu, their newly launched smartphone-optimized interface will be a turning point for the company, capitalizing on Japan’s increasing affinity for all things mobile. They plan to create a new kind of business where instead of selling just products online, they focus on ‘service e-commerce’.

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Cyta.jp provides users with information about 140 different private lessons (such as language learning, music study, or qualification acquisition) which are available at 3,000 locations around the country. Unlike other marketplace services which typically connect potential students to lesson teachers, the startup assures the quality of the lessons they introduce on the website by checking into who will teach or where it will take place. Since launching back in June of 2011, have served a total of about 20,000 users.

Shifting to Smartphones

Ariyasu explained the recent shift in their users’ preferences.

Smartphone access is rapidly increasing. It used to account for just 10% of all access, but it reached 45% back in June and has now surpassed desktop access.

Cyta.jp access statistics by browsing device (June 2012 - June 2013)
Cyta.jp access statistics by browsing device (June 2011 – June 2013)

As we reported several times before, smartphone access is increasing across many Japanese web services. Mr. Ariyasu believes in this trend, and is going to adjust his service accordingly.

We learned that people use smartphones during commutes and at home. Over the last two months, we’ve been focusing on developing a smartphone-optimized interface in order to provide [all] available features to smartphone users.

The startup isn’t selling physical products on side, but rather lessons in the form of a service. It requires a business strategy different from that of conventional online retailers. The company expects to standardize its strategy and expand business to other local community-based services. He adds:

We plan to allow users to book a local service using our website and consume it offline. These services include things like baby sitting, waterworks repair, and even decorative nail painting. Major e-commerce sites such as Rakuten or Amazon will not be able to sell these services online. But we believe consumers will want to buy them online.

This concept is somewhat similar to the group-buying service trends initiated by Groupon. It’s relatively easy to build a system that allows users to discover and find a service they may be interested in. However, in order to encouraging consumers to buy the service and give them a positive user experience, it probably requires a little more know-how. In fact, with group-buying services there have been difficulties in terms of how participating retailers delivered their services, often resulting in poor service quality.

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Cyta.jp has been trying to ensure quality by interviewing lesson teachers prior to hiring, or carrying out surprise inspections of lessons via ‘mystery shoppers’ (so to speak). It is through this extra effort that the company plans to be a leader in the service e-commerce industry.

Personally I was a little unsure if this quality assurance policy could co-exist with business scalability. But Ariyasu explained:

I don’t think a costly business is unscalable, it’s a bit of a misconception. In fact, group-buying businesses were using a bunch of people for sales, but their business were successfully scaled. Whether or not your business is scalable depends on the whether you can be persistently profitable, so you can receive funds and invest in the business to scale up when needed.

It will be interesting to see what kind of an impact Cyta can make. And it will be perhaps even more interesting to see if many other young startups follow in this sort of service e-commerce in the future.