When Mercari raised US$75 million in Series D, it finally looked like Shinzo Abe’s dream of Japan creating 20 unicorns within five years was taking off on the right note.
Mercari’s success seemed like the ideal example of how committed Japan was to turning into the next heaven for tech startups. But has this dream materialized?
A year later, how are things looking for Japan in terms of unicorns and other tech startups?
Here are foue Japanese unicorns that have been successful so far. We further use them to rate Japan’s performance against the big boys in the tech world. Read on!
Mercari
Founded in 2013, Mercari is the first true unicorn in Japan. The e-commerce app is a marketplace for people looking to buy and sell literally anything. Through its mobile Mercari App, users can log in and post classified ads on the products they intend to sell, and buyers can access the products and make a purchase directly from the app. The app’s operation is very similar to sites such as Amazon and eBay.
In its first four years of operation, Mercari earned millions of dollars and was officially declared a unicorn when its value crossed the coveted US$1 billion mark. Following its massive success, Mercari decided to go public through the 2018 IPO and therefore officially ceased to be a startup. Still, its status as the first-ever Japanese unicorn was already cemented.
Mercari’s success coincided with Japan’s awakening to the fact that the future was in tech. Then, the government was rallying its citizens to invest more time and resources in new startups that would help them change their lives.
Preferred Networks
Preferred Networks banked on the craze of IoT to prosper in the Japanese market and got to a value of more than US$2 billion faster than even Mercari did. The AI company specialises in making everyday equipment intelligent by incorporating modern software into the devices we need for our daily tasks.
From cars to home systems to medical equipment, Preferred Networks aims at connecting all essential equipment around us and make our lives easier. The company gained popularity with both the government and the public as its sales and value grew very quickly in a very short period.
SmartNews
When SmartNews’ value crossed the US$1 billion mark in 2019, it officially became the latest unicorn in Japan. The app scours the internet creating a customised news feed depending on the genre of content that the user loves to consume and the top publishers in that genre.
Be it entertainment, personal finance, or politics, the app presents just the news that is likely to interest the reader. It has a beautiful interface with 0 loading time with or without internet connectivity.
The prospect of getting all your news at one spot without having to sort and sift out thousands of irrelevant stories appealed to millions of Japanese. They use it on a daily basis elevating the startup to the unicorn status.
Liquid Group
Liquid Group also has a value of US$1 billion as of 2019 and prides itself on providing its users with a safe platform for fiat and cryptocurrency assets exchanging. The trading platform raised enough venture funds in 2019 and was instantly declared a unicorn five years after its launch in 2014.
Also read: Japan’s startup ecosystem has yet to fully mature, says Cool Japan Fund’s Shinnosuke Watanabe
Liquid Group’s success is ironical in many ways because Japan enjoys a constantly volatile relationship with cryptocurrencies. Liquid Group’s model of business and trustworthiness have managed to bring the company to greater heights and give it the unicorn status.
Japan and the big boys of tech startup world
Although the above-mentioned unicorns have done very well in their respective fields, Japan is still behind the other big boys when it comes to tech startups. Countries like China which is regarded as the tech-startup ultimate heaven, and the US which has produced the most unicorns in the world, are still miles ahead of Japan.
Surprisingly, even countries with an inferior economy like South Korea and even Indonesia are better at producing unicorns. The main reason why Japan lags behind in this facet is the lack of proper financing of startups by investors and the government. Developers also don’t take enough risks with their ideas and this leaves them sitting on gold mines.
The final contributing factor to the low number of successful unicorns in the country is the fact that established companies tend to go public as soon as they can. This mitigates risk and increases their chances of getting massive investments from potential investors.
Looking at 2020
If Prime Minister Shinzo Abe’s words are anything to go by, then Japan might turn into the next startup heaven for developers. Abe pledged full government support to startups and promised to make investment laws a little more favourable to those looking to take risks by investing in tech companies.
Publicising the unicorns will have a positive impact on how the audience perceives such companies and contribute to the increasing number of investors.
If you are a tech startup in Japan, there is no better time to look for venture funding than now. The country seems ready for you and if you play cards right, you might be one of the 20 unicorns that the country is expecting to churn out in the next five years.
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