Tokyo FinTech Digest #8
For us, the new year really only starts once we have the “Coming of Age Day” behind us, which falls on the second Monday in January. While most companies only start work on January 3, or even later, the first days of the new year are typically occupied by formal client visits, praying for good business at the temple, etc. Now that everyone is back at the office (sic!), it seems a good time to pick up our newsletter again.
Since we were on the topic of adulthood already, just note that there are changes to the civil code in Japan coming in April that lowers the legal age to 18 from 20 years old. The age for marriage will then be uniformly 18 years, regardless of gender, while girls can get married from age 16 onwards, and boys from 18 onwards (with parental approval) under current rules. As vices like drinking alcohol and gambling remain at age 20, it is mostly the ability to enter into legal contracts independently that gets affected. Credit cards, anyone?
The news that got our attention this week centered largely around corporate venturing activity.
India’s neobank Jupiter has raised USD 86m in a Series C round, including MUFG Innovation Partners, the corporate venture capital arm of Mitsubishi UFJ Financial Group, marking its first investment in the booming FinTech ecosystem on the subcontinent. Jupiter launched in beta mode in the middle of 2021. The round was led by Tiger Global, QED and Sequoia Capital India. Noteworthy: Brazil’s superstar Nubank, the largest digital banking platform outside of Asia, also participated in the round. Please watch out for our new eXponential Finance Podcast coming out next week, which will take a closer look at Brazil’s FinTech ecosystem.
In the more traditional finance sector in India, non-bank financial services company DMI Finance raised USD 47m from two existing investors and Sumitomo Mitsui Trust Bank (SumiTrust) as a new investor. DMI Finance has been a lender in India since 2009, offering personal loans, lines of credit, BNPL, OEM financing, and MSME loans. The new financing is to allow a monthly growth rate of ten percent during 2022.
Lastly, Malaysian digital payments and fintech-as-a-service company SoftSpace raised USD 5m from JCB. This is the first external funding for SoftSpace since 2017 and 2018, when transcosmos (2017) and Sumitomo Mitsui Cards (2017, 2018) invested. Founded in 2012, Soft Space works with over 30 financial institutions across ten countries that have adopted its payment solutions.
In the blockchain world, GMO Internet and the Klaytn Foundation have announced a partnership to explore blockchain business synergies on Klaytn, a blockchain initiative by the Kakao Group. Aside from its FX trading platform and brokerage, internet bank, the payment gateway businesses, and cryptocurrency exchanges, GMO Internet is also the issuer of stablecoins GYEN and ZUSD, which are pegged to JPY and USD respectively. While the Klaytn Foundation manages the US$500 million Klaytn Growth Fund to support ecosystem development, it was not disclosed whether some of these funds will be allocated to GMO Internet for Klaytn adoption.
To save the worst for last, megabank Mizuho started 2022 just like it closed out 2021, with a system outage. It is a sad story that we have recapped in a good amount of detail. Mizuho is due to submit its business improvement plan to the Japan FSA on Monday, January 17.