Tokyo FinTech
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Tokyo FinTech

5 out of 250: Japan’s top FinTechs

The CBInsights FinTech 250

CB Insights unveiled the FinTech 250 — a list of 250 of the most promising private companies applying a mix of software and technology to transform the financial services industry — at the Future of FinTech conference on June 26, 2017. The FinTech 250 raised nearly $32B across 766 deals since 2013. 23 countries are represented on the list, and there are five FinTechs from Japan, which we will present here:

Folio offers theme-based stock investment models and a robo-advisor-enabled asset management platform. It is the first entrant in the online brokerage sector to deal in Japanese stocks in roughly a decade. Founded in December 2015, Folio has raised approximately USD 19m in two rounds from DCM Ventures and Draper Nexus (seed round, March 2016), JAFCO, Monex Ventures, Mitsui Sumitomo Insurance Venture Capital, and Rakuten FinTech Fund (January 2017). The minimum investment into each theme, such as “2020 Olympics” has been set at JPY 100,000.

freee is an automated online accounting software developed for small- and medium-sized businesses (SMBs). It syncs with bank accounts and credit card accounts and automatically categorizes income and spending through text analysis. All users have to do to generate financial statements is to review how freee has categorized items and click to approve. It offers a freemium model and its paid plan begins at JPY 980 per month per business.

The company, formerly named as “CFO K.K.”, was founded in July 2012 led by Daisuke Sasaki, who previously headed up Google’s SMB marketing in Asia Pasific region. freee is the winner of Invinity Ventures Summit Launch Pad 2013 Spring, the most prestegious demo event in Japan. freee has raised approximately USD 85 million in seven rounds since 2012, with the last round to date taking place in December 2016.

Moneytree helps users to get a snapshot of their personal finances. They can input multiple bank accounts, credit cards, and even Japan’s ubiquitous loyalty cards into the app to visualize spending habits, account balances, and receive alerts when payments are due or points are set to expire.

A premium feature for businesspeople allows users to flag purchases in the app as work expenses, then export the data in a variety of formats to be sent to their employer. There’s also an enterprise version for aggregating corporate accounts, which the startup touts as a first for Japan.

Unique in the Japanese market, Moneytree obtained investments from all three Japanese mega banks — Mitsubishi UFJ, Mizuho, and Sumitomo Mitsui — in the last funding round in March 2017. It has most recently been launched in Australia as well.

Money Design currently the largest robo advisor in Japan, measured by assets under management (AUM). Money Design’s application, Theo, uses algorithms and artificial intelligence (AI) that was previously only available to professional investors. With Theo, individuals can invest in a customized portfolio selected from 6,000 ETFs, representing 35 world currencies and 11,900 different stocks from 65 countries. Money Design charges a one percent asset management fee for its service. The majority of Money Design’s investors are regional banks, such as Yamaguchi Financial Group, Bank of Kyoto, Musashino Bank, Hyakugo Bank and Toho Bank, who all participated in the most recent funding round in November 2016, and are ultimately expected to white label the Theo application; MoneyDesign has raised approximately USD 25 through its history.

WealthNavi offers a cloud-based asset management and robo-advisory service that helps middle-income people better locate diversified investments internationally. It is currently the closest pure robo advisor competitor to Theo. Following a USD 15m Series B funding round in October 2016, WealthNavi has entered into a business alliance with SBI Securities and Sumishin SBI Net Bank. This allows WealthNavi to provide robo advsior services to the customers of SBI Securities, which has about 3.6m accounts. WealthNavi has raised approximately USD 21m since its launch in April 2015.

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