It may not be happening so often now but unicorns (startups valued over $1 billion) are still being born and Japan has just welcomed its third into the world: flea-market app Mercari.
There seems to be some disagreement over whether Mercari is actually Japan’s first unicorn or not. To be clear, Japan’s billion-dollar club is fairly sizeable. Tech In Asia reveals that internet company’s like Rakuten, CyberAgent, DeNA, and Mixi all fit the broadest definition of unicorn. But to qualify as a true unicorn — as first defined by Cowboy Ventures’ Aileen Lee — a $1 billion startup also needs to have launched after January 2003. In Japan, this exclusive club already includes Colopl and Gree, but Mercari is unique in that it’s not a games developer but an e-commerce platform.
TechCruch reports that Mercari’s latest $75 million round — backed by Mitsui & Co, Development Bank of Japan, Japan Co-Invest, Globis Capital Partners, World Innovation Lab, and Global Brain — brings the total funding to $111 million. The firm wants to use this money to expand stateside, bringing it up against titans like Amazon and eBay, as well as other well-funded startups like Wish.
The jury is still open on whether this strategy will pay off. Already the startup has been compared to the likes of Rakuten and Alibaba, both of which have so far failed to break America in any meaningful way. Mercari’s CFO Kei Nagasawa is confident his firm has a shot but is under no illusion over the company’s need to adapt. He told TechCrunch:
“I think that’s the key to see how our product thrives in the U.S. We’re not doing a fundamental change of our product, but there are a lot of tweaks. For example, in Japan, people spend a lot of time on the platform. The average daily active user spends more than 40 minutes on the platform. It’s like a magazine, you flip through the pages but you aren’t looking for something specific,” he says. “That’s the preference for Japanese users, but in the U.S. people want to search more efficiently and they want more recommendations.”
Photo: Ryan and Sarah Deeds