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Funderbeam, stock exchange for startups, teams up with Taizo Son for Asia expansion

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See the original story in Japanese. This is a part of our on-site coverage of Slush Tokyo 2017. Funderbeam, originally from Estonia, offers a blockchain-based stock exchange platform for startups. The startup’s founder and CEO Kaidi Ruusalepp took the stage at Slush Tokyo 2017 today where she announced that they have secured 2 million euros from Mistletoe, led by Japanese renowned entrepreneur/angel investor Taizo Son, and will seek to advance into the Asia-Pacific region, including Japan, under a strategic alliance. Funderbeam was founded in 2013 by Kaidi Ruusalepp, who previously served as CEO of the Estonian stock exchange Nasdaq Tallinn. Beginning in April of 2016, they added a platform that allows startups to receive funding, and a platform on which startup stocks can be traded. According to Funderbeam, the cumulative funding to date is 4.8 million dollars (according to Crunchbase it is 4.75 million dollars). Their early investors include Skype co-founder Janne Tallinn. In addition, they have fundraised 424,000 euros from their own funding platform. Funderbeam already has an office in the financial hub of London, and has already established its solid presence in the European market through business tie-ups with the Zagreb Stock Exchange in Croatia and the Ljubljana…

Funderbeam’s Kaidi Ruusalepp shaking hands with Mistletoe’s Taizo Son
Image credit: Koichiro Shimojo / Slush Tokyo 2017

See the original story in Japanese.
This is a part of our on-site coverage of Slush Tokyo 2017.

Funderbeam, originally from Estonia, offers a blockchain-based stock exchange platform for startups. The startup’s founder and CEO Kaidi Ruusalepp took the stage at Slush Tokyo 2017 today where she announced that they have secured 2 million euros from Mistletoe, led by Japanese renowned entrepreneur/angel investor Taizo Son, and will seek to advance into the Asia-Pacific region, including Japan, under a strategic alliance.

Funderbeam was founded in 2013 by Kaidi Ruusalepp, who previously served as CEO of the Estonian stock exchange Nasdaq Tallinn. Beginning in April of 2016, they added a platform that allows startups to receive funding, and a platform on which startup stocks can be traded. According to Funderbeam, the cumulative funding to date is 4.8 million dollars (according to Crunchbase it is 4.75 million dollars). Their early investors include Skype co-founder Janne Tallinn. In addition, they have fundraised 424,000 euros from their own funding platform.

Funderbeam’s funding/profile page on the Funderbeam platform

Funderbeam already has an office in the financial hub of London, and has already established its solid presence in the European market through business tie-ups with the Zagreb Stock Exchange in Croatia and the Ljubljana Stock Exchange in Slovenia, but in terms of global expansion, their partnership with Mistletoe and entry into the Asia-Pacific region is a first for them.

In an interview with The Bridge, Ruusalepp emphasized that priority was given to expanding into the Asia-Pacific region rather than entering the US in light of the rapid growth of the market, and that for the purpose of promoting global development they seek alliances with optimal partners who best understand the market in their regions, thus the decision was made that Mistletoe would be their strongest partner in the Asia-Pacific region.

In this vertical, the Thai Stock Exchange revealed last year that it will open a startup-focused stock trading platform in the third quarter of 2017. Additionally, in relation to startup databases, Hong Kong’s OddUp, the US’s Mattermark and CB Insights may be in competition, but for Ruusalepp, Funderbeam’s strength lies in the combination of their data (holding data analytics of 150,000 startups around the world that investors can use for investment decisions), funding, and trading.

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Since the platform launch last April, the company says that investors have invested more than 2 million euros through the Funderbeam platform, and the amount of transactions total 100,000 euros in more than 80 countries.

Mistletoe’s President and CEO Taizo Son elaborated on why they invested and allied themselves with Funderbeam in the following statement. (Excerpt)

Mistletoe engages in various activities to support and grow a startup ecosystem in which entrepreneurs and startups can grow freely.

And for the healthy development of this ecosystem, a transparent and open fundraising process is one of its critical components.

With regards to how the platform is expanding into the Asia-Pacific region, both companies will explore a concrete strategy from now on.

Translated by Amanda Imasaka
Edited by Masaru Ikeda

Japan’s Send, data-driven food distribution platform for restaurants, secures $4M

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See the original story in Japanese. Tokyo-based Planet Table, a ‘food tech’ innovator specializing in food delivery using big data, announced on Wednesday that it has fundraised about 400 million yen (about $4 million) from SBI Investment, Genuine Startups and Mistletoe. Details such as the payment date are kept private. This follows their previous $850,000 funding back in a series A round in January of this year. The company unveiled, together with this, that the number of restaurants using their farm products distribution platform Send (released August of 2015) has reached around 1000, with the number of food producers topping out at 3000. The funds secured this time around are being used to establish a new distribution center in Tokyo named “Gate Meguro” whose focus will be to expand the deliverable area, among other things, and also to take on the challenge of constructing a new logistics model. Additionally, Seasons!, a direct trading platform for food producers and buyers that was launched in June as a closed beta for authorized parties only, is set to open to the general public this fall. Over the next year and a half the company plans to increase the number of personnel from the…

The Planet Table team
The Planet Table team

See the original story in Japanese.

Tokyo-based Planet Table, a ‘food tech’ innovator specializing in food delivery using big data, announced on Wednesday that it has fundraised about 400 million yen (about $4 million) from SBI Investment, Genuine Startups and Mistletoe. Details such as the payment date are kept private. This follows their previous $850,000 funding back in a series A round in January of this year.

The company unveiled, together with this, that the number of restaurants using their farm products distribution platform Send (released August of 2015) has reached around 1000, with the number of food producers topping out at 3000. The funds secured this time around are being used to establish a new distribution center in Tokyo named “Gate Meguro” whose focus will be to expand the deliverable area, among other things, and also to take on the challenge of constructing a new logistics model.

Additionally, Seasons!, a direct trading platform for food producers and buyers that was launched in June as a closed beta for authorized parties only, is set to open to the general public this fall. Over the next year and a half the company plans to increase the number of personnel from the current 20 to about 35.

send-gate-meguro
The Gate Meguro distribution Center

‘Cloudizing’ farm products distribution

Send, the farm products distribution service that carefully connects producers and users by their respective supply and demand data in an effort to solve the problem of food loss, will move toward the next big stage. To read more about the future aims of SEND please refer to the following article written last year.

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The investigation into whether the attractiveness of food made by producers of agricultural, livestock and marine products came across, and if there was a decrease in loss of opportunities for restaurants, etc. for their users, revealed that by a large number of interested parties welcome their distribution service. Planet Table CEO Shin Kikuchi responded thus:

Thanks to all the support, we have moved our center (previously in Shibuya) to Meguro. The one truck we had one year ago has grown to 8 trucks. To evaluate the restaurant side of business, at first there were many items to assemble, or cheap items.

There were a lot of these types of things, but gradually we moved toward never experiencing shortages, etc., and usability. On the producer side, we are getting the same products put into circulation before now bought at 1.2 times the price, one effect being customers have come out pleased with their price per acreage more than doubling.

Now, business is booming and the company receives so many requests, such as the desire by some to increase the meat services, that its finding it difficult to keep up.

send-truck
The outsourced delivery network is set to increase to 10 trucks this year

On the one hand, it takes time and effort for distribution. They posses the physical distribution center and trucks, and also an internet business with the commonly held notion with its forced management could create a contrarian environment, thus making it risky. Naturally, the increase of trucks and delivery personnel creates a heavy burden on management as well.

The construction of a virtual distribution network solves these problems. Kikuchi remarked from when the project was originally launched on whether an Uber inspired model might be a good choice or not. And now, in order to achieve this they are beginning delivery tests of an outsourcing format.

Maybe we can call it a delivery-sharing model. This model answers the problem of how to deliver efficiently in an urban area, so we are testing it with our outsourcers. To pick up regionally produced farm products, we can have them go around to venues such as Michi-no-Eki, or roadside stations across Japan. We’re trying various ideas.

To explain a little, the producers make a crop which must then be collected by a Send team member. It is easy to imagine how the system would be the best option for finding the most efficient route. However, then delivering the goods to restaurants will require some technique.

send-sausages
A dish of Sausages handled by Send. Kikuchi finds most products himself by traveling around Japan.

Kikuchi added:

We will share revenue from the sales restaurants buy from the deliverers. So, it’s not just just delivering goods that have been ordered, but requires presenting the goods to restaurants in an enticing way.

Here the data becomes key. The Send platform owns the data showing what kind of customer each restaurant is and what product they will want and when. So based on this information, delivery people can obtain the knowhow to make attractive propositions.

Production, distribution, and usage–place these three entities into the virtual network and the patform can provide the data to connect them together. Because the virtual network does not stick to any one of these resources, it becomes easy to scale.

On top of this, the team has also prepared measures to reduce loss that occurs at the time distribution. We will report the details of this at a later date.

Translated by Amanda Imasaka
Edited by Masaru Ikeda

Project Mistletoe launched – Taizo Son becomes mainstay for young entrepreneurs

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See the original story in Japanese. There will be a new hub being set up within Tokyo’s startup scene. The hub is named Mistletoe and offered by Taizo Son, the remarkable Japanese serial entrepreneur who has survived the chaotic dawn of Japan’s internet industry. Son explained the reason why he has named it so. A mistletoe tree produces a lot of berries, which is an ideal food for birds during winter. Birds eat mistletoe berries and deface the forest, but then new trees will sprout from the ground and expand the forest. It is better not to position the Mistletoe program as an incubation initiative. It’s neither the pure investment efforts we often saw a few decades ago on Japan’s emerging company market nor a seed accelerator inspired by Y Combinator. Son described the project as a vehicle for co-founding businesses but the fact is that it is not so easy to express in simple terms. I recently had a chance to hear more about the new project from Son. Mistletoe program concept The Mistletoe project is not a so-called incubation program for entrepreneurs but operated in the form of co-founding a business with the business founders having a core…

mistletoe_logo

See the original story in Japanese.

There will be a new hub being set up within Tokyo’s startup scene. The hub is named Mistletoe and offered by Taizo Son, the remarkable Japanese serial entrepreneur who has survived the chaotic dawn of Japan’s internet industry.

Son explained the reason why he has named it so.

A mistletoe tree produces a lot of berries, which is an ideal food for birds during winter. Birds eat mistletoe berries and deface the forest, but then new trees will sprout from the ground and expand the forest.

It is better not to position the Mistletoe program as an incubation initiative. It’s neither the pure investment efforts we often saw a few decades ago on Japan’s emerging company market nor a seed accelerator inspired by Y Combinator. Son described the project as a vehicle for co-founding businesses but the fact is that it is not so easy to express in simple terms.

I recently had a chance to hear more about the new project from Son.

Mistletoe program concept

taizo-son-at-mistletoe
Taizo Son in the Mistletoe office
Photo by Takeshi Hirano, The Bridge

The Mistletoe project is not a so-called incubation program for entrepreneurs but operated in the form of co-founding a business with the business founders having a core idea or technology. Unlike conventional acceleration programs that typically have a specified time-period or an investment ratio, every project participating in the program will be handled under different case by case criteria.

Son explained:

Under the concept of this program, we will launch a business with its founders together. They need to bring a core technology and idea, but we will found a business with them, set a valuation for it, then work together on product development, fundraising and business development. That’s why we can’t just deal with a few projects per year. If we continue for five years, we would be able to work with more or less around 20 projects at most. […]

We’ll be doing a startup studio business. There’s a startup studio company called Expa in Silicon Valley, which we see as our role model. The company’s founder Garrett Camp is famous for having invested in Uber, and he has curated powerful people leveraging his network to propose the concept: a company which creates new companies.

This method may be close to EIR (entrepreneur-in-residence), intrapreneurship or other similar styles that Japanese tech incubator Beenos (TSE:3328) has adopted, where startups are based in an incubator’s venue and nourished upon receiving mentorship from designers and programmers at the incubator.

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Son and his team has rented a 1,300 square meters venue to make the studio possible. He said:

Many of the topics we’re dealing with are still in stealth mode so we can’t disclose them. When launching a business, many of us will do something a half step ahead from now, right? VC firms carry things out one step ahead.

However, our Startup Studio wants to work on things 1.5 to 2 steps ahead. For example, Fintech or Adtech businesses are a half step ahead business. Artificial intelligence and robotics are one step ahead. That’s why we must go beyond these.

office2-compressor
The Mistletoe office’s floor plan (upper floor)
Image credit: Mistletoe
office1-compressor
The Mistletoe office’s floor plan (lower floor)
Image credit: Mistletoe

While Son says the program will be processed on an issue-driven basis, I was told that it will address people’s bottom line problems such as global food-supply issues, low birthrate and aging society, in addition to logistics issues.

He continued:

We will support novel ideas and entrepreneurs aiming to solve problems from an oblique angle over a mid- or long-range period. That’s why our main focus will be on the research and development businesses. I think an investment amount per project will be larger here than other typical cases.

These are description in text about the Mistletoe program. It’s obviously interesting as content. However, what’s more important here is that the program is conducted by Taizo Son himself.

How on earth can the team change the world gradually? In order to better understand the core context of their strategies, let’s look back at the roots of the project before it was born.

Indigo and Taizo Son

looking-for-bill-gates
Taizo Son and his team at Indigo (From Newsweek’s coverage of Indigo via Taizo Son’s Blog)

Many of our readers may recall how Son started being involved in the startup community. Son encountered Yahoo co-founder Jerry Yang when attending the University of Tokyo, which led him to get involved in a project to launch Yahoo Japan. To prepare for it, Son launched a company called Indigo (currently known as Asian Groove) with ten of his classmates in 1996.

Regarding Indigo, Son was quoted in a book covering the early days of Japan’s internet industry back in 1990s to 2000s. He was as young as 27 years old when this book (Bit Valley Beat) was published.

In 2000, Son says “I’ll launch at least 10 companies this year”. Launching venture businesses in a systematic approach is Indigo’s primary business. Not only big companies but also individuals can bring their ideas to the company. Indigo invests their know-how and funds in prominent ideas.

What do you say? Yes, you see that Son started working on somewhat the original form of the Mistletoe program more than ten years ago.

One companies born out of Indigo is Onsale, currently known as Gungho Online Entertainment (TSE:3765). Having experienced the collapse of the dotcom bubble in early 2000s, he revived the business and IPO-ed the company with hugely popular titles like Puzzle & Dragons and Ragnarok Online by uniting efforts with Kazuki Morishita, the current president and CEO of Gungho.

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In my previous interview with Son, he raised Andreessen Horowitz and Alphabet as rivals to Mistletoe. These two companies have a different approach from Mistletoe because they are focused on investment but the three companies have many points in common in terms of illuminating the global community as a new business breeder.

Many of our readers are also familiar with Marc Andreessen and Ben Horowitz, the founders of Andreessen Horowitz, through Ben’s authored book “The Hard Thing about Hard Things.” Netscape and Loudcloud are symbolic entities from the dot-com bubble in the US while Marc and Ben had overcome hardships; meanwhile there is Son in Japan. I can’t help feeling an indescribable charm of life in the fact that these entrepreneurs are working on the same topic at the same period after experiencing the same hardships.

Movida Japan and Taizo Son

An event of Movida Japan in its early days
An event of Movida Japan in its early days
Photo by Takeshi Hirano, The Bridge

Let’s get back to the original topic. Several years have been passed since the launch of Indigo Project where Son and his team were aiming of launching venture businesses successively in a systematic approach. Then he joined his brother’s company Softbank Group, and subsequently got back into the limelight with the launch of Movida Japan in 2011.

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Looking back at the time, Japanese internet giant Digital Garage (TSE:4819) and its affiliate companies launched Open Network Lab advocating the creation of Y Combinator in Japan while several other VC firms were starting similar acceleration programs. Movida Japan was among these and had been providing a several-month intensive incubation program in cohort batches. In an interview with Japanese business magazine Nikkei Business, Son described how he had launched Movida Japan.

I’ve been dashing forward to gain results while looking at my brother Masayoshi and at the people’s sense of values. […] However I suddenly realized I’m already just before 40 years old. Confucius says one has no doubts at forty. However, I had been always puzzled in my busy minute-by-minute schedule. […] What the heck I should do?

Spending two years, my conclusion was transferring my experience to young entrepreneurs. In addition, I decided to form a startup ecosystem surpassing Silicon Valley in East Asia by 2030.

I asked Son what on earth Movida Japan was. He responded:

What’s the most we have learned through it was having a place rather than us just providing mentoring or support young entrepreneurs. That was where people were polishing each others, aiming to go forward and higher. It was big for us to experience something small from the Silicon Valley startup ecosystem. I was working for Softbank Group during the same period where I could gain much experience and build my network.

When we speak with Son, he often uses this diagram (see below). That was so when I interviewed him at the launch of Movida Japan.

mistletoe-fostering-ecosystem-diagram
Image credit: Mistoetoe

I’ve been using this diagram before launching Movida Japan. Yet I was wondering what we should start with. But I thought it would sprout out from seeds here (Movida Japan). On the side, in discussions with Fumihara-kun (CEO of Nana Music) over an offline fan meeting, I was conducting billion dollar M&A deals. Such a major gap gave me a great input.

I spent almost three years doing various things from scratch, and could finally organize my thoughts. That’s Mistletoe.

Mistletoe orchestrates innovations

mistletoe-orchestrates-innovation
Image credit: Mistletoe

Looking back at what he had been doing at Indigo and Movida Japan, what he’s trying to do won’t change a lot at Mistletoe neither. That’s to create new power and solve social issues. As he mentioned, his thoughts were well organized and his activities slightly upgraded at Mistletoe, where they will ‘integrate’ entrepreneurs with each others.

Son explained:

Every entrepreneur really needs his or her focus to gain success. But solving a big problem is difficult for a single entrepreneur. That’s why we are planning to integrate their skills in solving problems with each others.

Meta Entrepreneur, a superordinate concept that Son addresses, is called “Orchestrates Innovations” at the Mistletoe program. They aim to solve big problems through “chemical reactions” resulting from combining various technologies and expertise. To make these possible, Mistletoe is to provide human resources, goods and capital.

He continued:

Finally we have fixed onto what we want to do. Two missions, orchestrating innovations and forming an ecosystem to accelerate them — that’s just what we should do.

I believe this approach is now possible because the Japanese startup scene has a deeper talent pool of entrepreneurs and investors who have been nourished by Son and the Japanese market these days.

taizo-son-at-mistletoe-2
Photo by Takeshi Hirano, The Bridge

Son will celebrate his 20th anniversary this year since launching his first company while attending university. Concluding the interview, I asked him if he has anything unchanged since then. He replied:

I’ve been often expressing a “metaball” company. Appears to be like a globular cluster nebula. They are several objects, they look like one cluster when seen from a distance. At my company Indigo, there was no boundary defining inside or outside the team but everyone was located randomly around me and continued working.

Some people have come to us and then sped away like Halley’s Comet, others are still revolving around us. I’m told that’s the form of a company I had beem aiming for. It may not have changed a lot since my early days.

Translated by Masaru Ikeda
Edited by “Tex” Pomeroy