Japan FinTech Observer #59

Welcome to the fifty-ninth edition of the Japan FinTech Observer.

After a long while, we hosted an offline Tokyo FinTech Meetup again yesterday (May 13). If you would like to keep appraised of future events, please subscribe to the Japan FinTech Observer Calendar on Luma.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: The Korea-Japan Venture/Startup Investment Summit 2024 was held, featuring 13 startups selected by venture capital firms from both countries; Nudge has completed a Series A round extension; gumi Cryptos Capital has appointed a new Asia-based Partner; SBI Investment, MUFG Capital and Mizuho Capital invest in Orange, a Tokyo-based manga localization technology company; Saison Capital participates in Vietnam-based language learning and test preparation startup Prep's Series A; REAZON CAPITAL is looking to make eight investments in Southeast Asia this year, of which six will be in Vietnam; Indian lending tech startup Niro raises a pre-Series B from Marui Group, GMO VenturePartners, and Mitsui Sumitomo Insurance; Mitsubishi UFJ Bank and Hitachi ZeroCarbon collaborate on a different kind of BaaS
• Insurance: Tokio Marine?scored the highest favorability rating in the Americas; Japan Post will increase its stake in Aflac to around 20%; Nissay Information Technology and Finatext will collaborate on building a digital sales platform for life insurance
• Payments: PayPay, part of LY Corporation, achieved full-year profitability; Sumitomo Mitsui Card announces cashless campaign for SMEs; JCB is launching the “& JCB Fintech Program”, a program to support new entrants into the payment business; Rome is the first city in Europe to offer contactless payment services to JCB cardmembers
• Capital Markets & Asset Management: Goldman Sachs led major investment banks posting higher profits in Japan; Nomura commits capital to international asset management growth; the Financial Services Agency and the Bank of Japan are working on climate-related scenario analysis in the banking sector;
• Digital Assets: SBI Digital Asset Holdings and Chiliz plan to establish a joint venture in Japan, establishing a fan engagement platform; NTT DOCOMO will establish a new subsidiary, NTT DOCOMO GLOBAL, for its international business, including Web3 payment services; Tusima and payment aggregator Netstars collaborate in on-chain business
• The Last Word: Japan Web3 & NFT Chaos Map

Venture Capital & Private Markets

• The Korea-Japan Venture/Startup Investment Summit 2024 was held, sponsored by the Korean Ministry of SMEs & Startups and the Korea Venture Investment Corporation; the startup part of the event featured 13 startups (six from Korea and seven from Japan) selected by venture capital firms (e.g., Headline - Asia and IMM Investment Corp. ) from both countries, who gave investment pitches in front of investors from both nations
• Nudge has completed an additional Series A funding round, bringing the total amount raised in the Series A round to over JPY 3bn; this includes new investor TIS, an IT services company that became a strategic OEM partner for Nudge; Nudge is also raising operating capital through debt financing from Mitsubishi UFJ Bank to meet demand from increasing users making Nudge their main card
• gumi Cryptos Capital has appointed Evans Huangfu as a new Partner, effective April 2024; based in Singapore, Evans will lead the firm’s Asia efforts and portfolio strategy, significantly bolstering its presence and operations across the region
• Orange, a Tokyo-based manga localization technology company, raised JPY?2.92bn (approximately?USD 19.5m ) in pre-series A financing; the round included Globis Capital Partners, SBI Investment, Japan Investment Corporation (JIC), Mizuho Capital, and Mitsubishi UFJ Capital, among others
• Saison Capital participates in Prep's Series A: Vietnam-based language learning and test preparation startup Prep has raised US$7 million in Series A funding; the round was co-led by private equity and venture capital firm Northstar Ventures, and global asset manager Cercano Management Asia
• REAZON CAPITAL, the corporate investment arm of Tokyo-based information technology company Reazon Holdings, is looking to make eight investments in Southeast Asia this year, of which six will be in Vietnam; Reazon Holdings streamlined its investment activities across the group by setting up REAZON CAPITAL earlier this year; the VC arm invests in Seed to Series A rounds, writing cheques of up to $2 million
• Bengaluru-based fintech startup Niro is raising USD 4.3m in what seems to be its pre-Series B funding round; the lending tech startup is raising the capital from listed Japanese retailer Marui Group, along with its existing investors, which include GMO VenturePartners and Mitsui Sumitomo Insurance Group, among others
• A different kind of BaaS: Mitsubishi UFJ Bank and Hitachi ZeroCarbon have entered into a business co-creation agreement for Hitachi ZeroCarbon’s global Battery-as-a-Service (BaaS) business; as part of this agreement, MUFG Bank has decided to invest in Next Gen, a project established by Hitachi in the UK to deploy 1,000 electric buses
• Tokyo Women in VC have published an English translation of their “Japan Venture Ecosystem: Female VCs & Female Founders Report 2024”
• UB Ventures' SaaS Annual Report has been published in English.

Insurance

• Tokio Marine America?scored the highest favorability rating in the Americas when compared to other elite multinational carriers, outpacing rivals such as?Allianz?and?Lloyd's?by a couple of percentage points
• Japan Post will increase its stake in Aflac, making the company an equity-method affiliate; Japan Post currently holds approximately 7% of Aflac, acquired in 2020, and the four-year holding period entitles it to up its voting rights to 20%; the exercise of the right is expected to be approved at Aflac’s Annual General Meeting
• Nissay Information Technology and Finatext will collaborate on building a digital sales platform for life insurance by developing a system that connects the front application developed by NISSAY IT and the SaaS digital insurance system “Inspire” provided by Finatext, and jointly conducting a Proof of Concept (PoC) to propose digital insurance sales to life insurance companies; by combining low-code tools such as “AWS Amplify” and “Unqork” with “Inspire,” a web application system for multi-device insurance applications can be built in a short period with minimal coding

Payments

• LY Corporation, the parent company of Yahoo! Japan and LINE, released its FY2023 full year and Q4 earnings report, highlighting significant growth and strategic shifts; for the first time, the Strategic Business segment, primarily comprised of PayPay, achieved full-year profitability; this milestone reflects PayPay’s impressive growth and its increasing contribution to LY Corporation’s overall performance
• Sumitomo Mitsui Card announces cashless campaign for SMEs; in this campaign, a merchant fee of 2.70% on Visa and Mastercard sales will be charged, and 0.72% of the respective sales will be cashbacked at a later date; the cashback is capped at JPY 100,000 in total during the campaign period; if the 0.72% cashback amount exceeds 100,000 yen, the effective merchant fee will not be 1.98%
• JCB is launching the “& JCB Fintech Program”, a program to support new entrants into the payment business; FamilyTech will start issuing the Family Bank Card around June of this year as the first project utilizing this program; in addition to the brand licensing business, JCB will share its expertise in issuing and acquiring businesses, and propose and support solutions tailored to each company’s needs for payment services, products, systems, and operations
• Rome is the first city in Europe to offer contactless payment services to JCB cardmembers; the service, commonly known as open loop transit, is now available through Nexi, the leading Italian PayTech in Europe, which has entered into a strategic agreement with JCB to allow the holders of their contactless cards to access Rome’s public transportation by paying the fare in this extremely simple, fast, and secure way, thanks to the contactless sales channel developed by ATAC across the entire transportation network of Rome

Capital Markets & Asset Management

• Goldman Sachs led major investment banks posting higher profits in Japan as bond trading boomed, offering a cushion last year in an otherwise tough environment globally
• Nomura commits capital to international asset management growth: Nomura has integrated its public and private credit asset management offerings in the US as the Japanese group aims to grow the business outside its home market by lifting teams and making acquisitions
• The Financial Services Agency and the Bank of Japan are working on climate-related scenario analysis in the banking sector; in FY2021, the FSA and the BOJ conducted a pilot exercise using common scenarios in cooperation with three major banks and published the key results and takeaways of the exercise in August 2022; the FSA and the BOJ have now published a summary of subsequent initiatives related to the scenario analysis and the framework of the second exercise to be conducted
• In "Luck versus Skill: Evolution in Quantitative Evaluation of Investment Products", Michinori Kanokogi, Head of Solution Research at Nissay Asset Management, provides an overview of methods and approaches for quantitative evaluation of the performance of investment products

Digital Assets

• SBI Digital Asset Holdings and Chiliz plan to establish a joint venture in Japan; the Chiliz Group includes Socios.com, the world’s largest Web3 wallet and fan engagement platform with more than two million users, over 70 Fan Tokens launched so far for global sports organization partners, and more than 250,000 unique daily engagements; SBI DAH is also expected to join as a node operator of the Chiliz Chain to play an important role in the governance of the Chiliz Web3 ecosystem
• NTT DOCOMO will establish a new subsidiary, NTT DOCOMO GLOBAL, this July to expand DOCOMO’s global presence and growth by creating new lifestyles worldwide through advanced mobile technologies; the application services will include convenient Web3-based payment services that will enable individuals and companies to use blockchain technology easily and securely, and DOCOMO’s Data Marketing Platform (DMP) supported by AI
• Tusima and Netstars collaborate in on-chain business; Netstars put all payment data on the Tusima network for backup storage; as of March 2024, the Tusima network has stored Netstars’s 219 million transactions, involving a transaction volume of JPY 484.1 billion; the number of payment devices involved reached 300,000, covering nearly one million users

The Last Word: Japan Web3 & NFT Chaos Map

NFT Media has published its Web3 and NFT "Chaos Map". You can obtain a high-resolution image and a complete list of the companies covered from the NFT Media website.

If you would like to see more of our content, please head over to the Tokyo FinTech YouTube Channel or check out the eXponential Finance Podcast. Registrations for the Tokyo FinTech Meetup have moved to Luma.

We have also created two LinkedIn groups, the "Japan Startup Observer" if your interest in Japan goes beyond FinTech, and the "FinTechs of India" to capture the developments on the subcontinent. We invite you to join both these groups.

Have an awesome week ahead.