Revenue-based finance company Yoii completes JPY 800m Series A

Yoii, the operator of “Yoii Fuel”, a revenue-based financing (RBF) platform, has raised approximately JPY 800 million through a third-party allocation of new shares with Emellience Partners as the lead investor and participation from Itochu Technology Ventures, FFG Venture Business Partners, and 5 other existing investors. With this, the cumulative funds raised have reached approximately JPY 1.4 billion. By providing new fundraising methods that are neither debt nor equity, Yoii will continue to support the growth of startups.

Recently, in order to promote the “new capitalism” by the Japanese government, nurturing startups that solve social issues and realize a sustainable economy and society has been recognized as important for economic development. Last year in 2022, the government set out a “Five-Year Startup Fostering Plan,” increasing attention on supporting growth in this area. However, the current growth rate of startups and the number of unicorn companies (unlisted companies valued at over $1 billion) in Japan is low compared to the US and Europe, indicating a need for further support. One factor hindering growth is that fundraising for startups is mainly through equity finance (fundraising through issuing shares) or debt finance (fundraising through borrowing from financial institutions). For early-stage startups, there are cases where the funding threshold is high in terms of share dilution and collateral when borrowing.

To ensure funding reaches challenging startups and accelerate their growth, Yoii focuses on RBF as a method to evaluate still unrecognized corporate value and provide flexible financing. Globally, the RBF market size is expected to reach $3.38 billion (approximately JPY 483.8 billion at $1 = JPY 146.6) in 2023 and expand to $25.94 billion (approximately JPY 3.8 trillion) by 2027. As RBF plays a complementary role to equity and debt fundraising, RBF is expected to garner more attention domestically going forward. In 2023, the Financial Services Agency also began considering business growth security rights. Trends to support startups by looking at “future” assets rather than past assets as conditions for financing and fundraising are increasing.

The adoption of Yoii Fuel is also accelerating. As of the end of November 2023, the number of clients has increased by about 205% year-on-year, executed RBF amounts have increased by about 260%, and business negotiations have increased by about 250%. In addition, looking at the companies utilizing the service, about 30% are small and medium-sized enterprises, not limited to startups. Going forward, services provided to small and medium-sized enterprises in a wider range of regions and industries will also be enhanced.

In order to accelerate support for more startups and small and medium-sized enterprises to take on challenges, Yoii has carried out this round of fundraising for the purpose of “responding more to entrepreneurs’ ambitions” as a partner introducing RBF in Japan.

With Emellience Partners as the lead investor, Itochu Technology Ventures and FFG Venture Business Partners newly joined the existing pre-Series A investors for a total of 8 investor companies to raise JPY 800 million. Regarding FFG (Fukuoka Financial Group) Venture Business Partners, Yoii also plans to discuss partnerships for expanding sales with a perspective on fostering local startups.

Investors:

• Emellience Partners
• Itochu Technology Ventures
• FFG Venture Business Partners
• Mitsubishi UFJ Trust & Banking Corporation
• Inclusion Japan
• One Capital
• The University of Tokyo Edge Capital
• Norinchukin Innovation Investment Limited Partnership

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