Japan’s Fintech Ecosystem

  Source:    Unsplash

Source: Unsplash

Overview of Japan's Fintech Ecosystem

With Tokyo being one of the key financial markets, Japan’s Fintech scene has been growing steadily. Digital Payments represent one of the largest sub-sectors, worth around $151.036 million USD, and this figure is set to reach $184.025 million USD by 2022 (a 5.1% increase). Other nearby regions like China, Hong Kong and India are certainly strong and well-funded, but Japan has been developing prominent solutions that cater primarily to a domestic user base with specific requirements. Popular global Fintech events such as FIN/SUM and Fintech Japan help to put Japan on the world stage when it comes to discussing and showcasing the latest thinking. The Japanese government is working closely with startups and banks to create a truly integrated Fintech ecosystem.

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globalisation of japan’s fintech ecosystem

Although Japan is currently strong in the areas of digital payments, cryptocurrency and accounting solutions, there is a need for greater investment in and adoption of cybersecurity technologies. As Rugby 2019 and Tokyo 2020 approach, convenient and secure Fintech offerings will be expected. Japan was previously almost untouchable in terms of being subject to hacking incidents, but improved methods and technologies mean this is no longer the case. Major event organisers want to avoid incidents of hacking and compromised financial safety as much as possible, so this is one area where foreign startups can step in. Israel, for example, has a significant presence in the field of cybersecurity and several partnerships have already been set up, such as CyberGym, which helps deliver training to Japanese companies on how to prevent online attacks.

japan’s leading fintech startups

tech bureau

https://techbureau.jp/   

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Source: Coinpost


Founded: 2014

Founder(s): Takao Asayama

Funding received: $21.7 million

Annual Revenue: $5 million

Status: Venture – Series unknown


Summary: Tech Bureau provides services for cryptographic currency and blockchain. It operates Zaif, a cryptocurrency exchange, and COMSA, which provides businesses with solutions around Initial Coin Offerings (ICOs). In November 2018, Tech Bureau concluded a business transfer agreement with investment management company Fisco following a hack in September which compromised some user information. Zaif has around 730,000 accounts, which is still low in comparison to bitFlyer’s 2 million and Coincheck’s 1.7 million.

 
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Source: Liquid by Quoine


Founded: 2014

Founder(s): Mario Gomez Lozada, Mike Kayamori

Funding received: $123 million

Annual Revenue: $3 million

Status: ICO


Summary: Quoine offers a range of Fintech solutions, including; trading, exchange and next generation financial services. It is mainly known for operating Liquid by Quoine, a powerful cryptocurrency trading platform with seamless access to liquidity. It is suitable for both beginner and experienced traders alike.

 
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Source: bitFlyer


Founded: 2014

Founder(s): Takafumi Komiyama, Yuzo Kano

Funding received: $36.1 million

Annual Revenue: Unknown

Status: Venture – funding series unknown


Summary: BitFlyer is one of the leading cryptocurrency management and trading platforms in Japan, enabling users to easily make transactions with low fees. The user base is at more than 2 million. Along with other cryptocurrency platforms, the local Japanese bitFlyer operations received notice that they needed to improve regulations in order to prevent security breaches (as happened in the case of Coincheck).

 
 
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Source: Folio


Founded: 2015

Founder(s): Shinichiro Kai

Funding received: $79.5 million

Annual Revenue: $2 million

Status: Series A funding complete


Summary: Folio is a next-generation platform for both active and passive stock traders. It operates on the basis of choosing ‘themes’ for investment, whilst giving comprehensive and easy to understand breakdowns of company performance and expected returns. Investors include messaging app LINE and Goldman Sachs.

 
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Source: Trevor Paxton


Founded: 2012

Founder(s): Jonathan Epstein, Mark Makdad, Paul Chapman, Ross Sharrott

Funding received: $10.5 million

Annual Revenue: $1 million

Status: Series B funding complete


Summary: Moneytree is one of the leading digital kakeibo (household expense books) in Japan, offering an easy way to record and keep track of personal finances. It provides handy analytics to inform future spending. There is now AI functionality built into the apps to make the expenses adjustment function more intuitive and less taxing for users.

 
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Source: Pymnts.com


Founded: 2008

Founder(s): Russell Cummer

Funding received: $81.6 million

Annual Revenue: $6.8 million

Status: Series C funding complete


Summary: Paidy is an online and mobile payment service that does not require a user’s credit card information or pre-registration. It is ideal for people who want to pay quickly, conveniently and securely. As of November 2018, there are more than 1.7 million Paidy accounts. The company has received funding from Visa and they are partnering to offer alternative payment settlement services for Cash on Delivery, which is still quite prominent in Japan.

 

Source: The Bridge


Founded: 2015

Founder(s): Shinichi Takatori

Funding received: $10.8 million

Annual Revenue: $1 million

Status: Series A funding complete


Summary: Kyash is a pre-paid digital wallet app that allows for peer-to-peer payments as well as at global merchants that accept Visa. ‘Cashless’ is a buzzword in Japan and the concept is becoming more widely accepted. Kyash offers a convenient solution for  users to easily split bills such as dinner or taxi fares. Although technically Kyash is a Fintech startup, it is putting itself forward as more of a ‘lifestyle service’ that takes into account the importance of being able to pay anywhere, anytime, and without any restraints.

 
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Source: JAFCO


Founded: 2011

Founder(s): Kazuma Ieiri

Funding received: $19.8 million

Annual Revenue: $1 million

Status: Series B funding complete


Summary: Campfire is a crowdfunding site much like Kickstarter or Indiegogo, that helps to fund popular creative projects and new product developments. More than the equivalent of $70 million USD has been raised by over 700,000 people since its establishment. Similar companies include; JustGiving and Crowdcredit.

 
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Source: Origami


Founded: 2012

Founder(s): Yoshiki Yasui

Funding received: $88 million

Annual Revenue: $2.5 million

Status: Series C Funding Complete


Summary: Origami is one of the leading mobile payment platforms, with an app and paypoints available at convenience stores, fast food chains, department stores and other similar shops across Japan. In September 2018, the company announced a partnership with UnionPay as part of its international expansion plan. The app is intuitive, enabling users to pay quickly and easily with their digital wallet and receive discounts off their purchases while in store.

 
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Source: Makeleaps


Founded: 2009

Founder(s): Jason Winders, Paul Oswald

Funding received: $600,000

Annual revenue: Around $11 million

Status: Acquired by Ricoh


Summary: Makeleaps is a cloud-based invoicing software and next-generation business admin platform that enables users to easily keep track of accounting information. The company was completely bought out by Japanese electronics manufacturer Ricoh in October 2018. Similar foreign companies are; Invoicely, ZOHO, and Xero.

 

summary

As we can see, there is already a fair amount of competition from local startups in the payments and cryptocurrency sub-sectors. But a number of foreign Fintech startups, such as Transferwise, Revolut and WorldRemit, have chosen to set up offices in Japan as a stepping stone into the wider Asia market and have seen success in doing so. It is important to gauge the existing need for services in Japan and how Fintech companies can help fill the gaps. Business-to-business solutions are also very much in demand, with more and more companies moving to the cloud and searching for simpler, cheaper solutions to lighten their workload

 

How Tokyoesque can help your startup reach Japanese consumers

If you represent a UK-based startup (in Fintech or any other sector) and are considering expanding into Asia, Japan could be a great starting point that will lead to further growth not only domestically, but in other parts of the region such as China and South Korea. The multilingual and multicultural Tokyoesque team has a wealth of experience with understanding the startup culture both in the UK and Japan. We want to help our clients make the most of the opportunities available by providing cultural insights relevant to their industry, and fine-tuning your marketing communications in order to boost appeal.

Contact us to find out more.