LayerX CEO Yoshinori Fukushima (left) and Mitsui Bussan Digital Asset Management CEO Takashi Ueno (right).
LayerX, which provides corporate spending management SaaS, has announced that it has raised about 5.5 billion yen through a third-party allotment of shares with multiple VCs including the JAFCO Group as underwriters. The lead investor is Mitsui & Co. Mitsui & Co. has launched a joint venture with LayerX called “Mitsui & Co. Digital Asset Management” to provide asset management services utilizing digital securities.”Rivals are bank deposits”The total amount of operation is about 220 billion yen.
Yoshinori Fukushima (35 years old), CEO of LayerX, and Mitsui & Co. Digital Asset Management (hereinafter referred to as “Mitsui & Co. MDM) CEO Takashi Ueno (48).
“It’s good because there are multiple businesses” I felt a change in the direction of the wind
“The overall market sentiment for startups ispretty toughI think.We also become investors such as VCsrejected by many”
Yoshinori Fukushima, CEO of LayerX, reflects on the process of raising funds this time. In fact, according to a survey by INITIAL (Uzabase), 50 companies will raise in the down round in 2022.
Even in such an environment“We were able to raise it at a fair valuation.”(Mr. Fukushima) said that the company’s decision to be a “compound startup” was highly evaluated.
A compound startup refers to a startup strategy that provides multiple products, services, and businesses from the time of its founding. It runs counter to the Silicon Valley-style successful venture theory of “going through with just one product.”
“Due to this unstable market situation,“Companies with the ability to launch multiple businesses are more likely to make profits.”I came to receive the evaluation.
Until now, we have been doing SaaS, asset management business, and R&D.What kind of company are you after all?’, ‘That kind of company is not popular, so whatafter selling the businessSome investors said, “Please.” On the contrary, such people changed their reaction to “It’s good because there is MDM,”I strongly felt the change in the direction of the windYes.” (Mr. Fukushima)
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“Digital securities” that can invest from hundreds of thousands of yen in the building of your dreams
The R&D mentioned above is the privacy tech business Anonify. LayerX’s business consists of spending management SaaS “Bakuraku” series and asset management which is the theme of this article.
Mitsui Bussan Digital Asset Management (MDM), which operates the asset management business,Mitsui & Co., LayerX, SMBC Nikko Securities, Sumitomo Mitsui Trust BankIt is a joint venture (joint venture company) created in 2020 by investing in them.
The investment ratio is Mitsui & Co.53%For LayerX is35%It will become an equity-method affiliate for LayerX, a subsidiary of Mitsui & Co., Ltd.
The aim of MDM is to“Digital securities” backed by “real estate and infrastructure”It’s a new market. Digital securities are a mechanism that converts securities into digital data and manages them on a blockchain.small investmentbecomes possible.
The MDM business model basically consists of one fund per property,Returned as dividends after deducting the cost necessary for fund management from rent incomeA very simple thing to do.
Its greatest appeal has been limited to professional investors such as institutional investors and some wealthy individuals.Invest in real estate worth tens of billions of yen,“Individuals” can be made from “hundreds of thousands of yen” unitsThe point is that it becomes
Participate in city planning by investing, just as you participate in politics by voting. Investing in renewable energy infrastructure, as well as the building of your dreams, will make you feel like you’re doing something good for the environment.
Achieve the lowest commission in the industry by DXing the asset management business
“ALTERNA” to be launched by MDM. There is also a mechanism to know the operation status in real time.
MDM so farApartments and buildings in central Tokyoof major restaurant chains, includingLogistics base,Ryokan in Kusatsu OnsenSuchStable user fee incomeWe have acquired properties that can be expected to be used for digital securities and have issued digital securities.
total assets under managementAbout 220 billion yenClimb to
Usually asset management companies entrust sales to investors to securities companies, but in MDMEverything from sourcing (property search) to fund formation/management and sales is done in-houseis characterized by
Why do you do it all at once?actuallyAsset management business, especially fund management, is a series of huge and simple clerical workis.Move-in and move-out procedures, confirmation of rent payment, approval by paper and stamp, etc.digitalizationdoManaged by softwareby doing,Reduce labor costs and achieve “lowest commission in the industry”It is said that
Engineers seconded from LayerX to MDM have acquired qualifications related to the securities industry and are working hard to create good products.
MDM has already obtained licenses for “Type 1 and Type 2 Financial Instruments Business” and “Investment Management Business”, and has been selling to professional investors such as institutional investors. In the future, we will wait for the final approval of the relevant authorities as a “securities company” and then start selling to the general public, which is the “core” of MDM. The timing is scheduled for spring 2023.
Started in November 20221000 people pre-registered in 3 daysexceeded and is nowabout 2000is waiting. Expectations for real estate and infrastructure investment seem to be rising amid the volatility of listed stock prices.
“Securities company licenses are one of the most important things, so we can’t get them so quickly without a proven track record or trust.
Many power plays that can only be done by a large company,From the perspective of a competing startup, investment of money and people that “I will not be in trouble if this is done”Mitsui & Co. did it for us. Receiving such benefits is the real pleasure of collaborating with a large company.” (Mr. Fukushima)
After a dead end and a business pivot, to the present
The background to the establishment of a joint venture between Mitsui & Co. and LayerX dates back to 2018. Prior to LayerX’s business pivot (change of course), Mitsui & Co. called out to LayerX when it was using blockchain as its main business, and was exploring whether it would be possible to collaborate using technology.
That flow stalled for a while, and it was Mr. Ueno who was asked by a colleague if he had any ideas. In anticipation of the enforcement of the revised Financial Instruments and Exchange Act in 2020, Mr. Ueno wanted to develop a digital securities service for individuals, and his encounter with LayerX was a perfect opportunity.
The first thing we created was a function that enables trading of digital securities on smartphones.However, as mentioned above, it puts pressure on the asset management business.It is not the process of “distribution” that will add value if it is eliminated, but the huge administrative work of fund management.Realize that and change direction. Up to now.
“As for what the personnel expenses for the asset management business are used for?”Advanced Judgment”On the other hand, I think that simply changing the clerical work performed by people to software will have a considerable impact on the financial industry.” (Mr. Ueno)
There is also anxiety from within Mitsui & Co. about the joint venture
In-house at MDM.
What is worrisome is that Mitsui already has departments and affiliated companies that carry out the asset management business. Why was it necessary to establish a new joint venture with LayerX?
“Mitsui & Co. has a track record of managing hundreds of billions of yen in the asset management business.It takes time to change existing ways of doing things, and there is a lot of fear.I’d rather build it from scratchI decided that.” (Mr. Ueno)
However, there were voices of concern within Mitsui & Co., Ltd.
“Unlike the asset management business that Mitsui & Co. has been doing so far, this time we will also sell ourselves.
Can you really do well, including employee management? Are you okay? and” (Mr. Ueno)
Venture culture with large corporate compliance
Inside the company, there is also the usual Dora that is often seen in startup companies.
Of course, there are also opposing voices. Collaboration between large companies and startups often fails. Above all, in order to overcome the “differences in culture,” which is an issue, considerable care was taken in creating the organization.
“Many Joint Ventures Fail CultureTo do. For example, even if a company is led by Mitsui, they try to do everything the Mitsui way.” (Mr. Ueno)
Since its founding, MDM has consistentlycentered on engineersWe have created a culture of
About 40 employees. From Mitsui & Co., Ltd., in addition to President Ueno,In-house recruitmentEmployees of finance and asemane fields who raised their hands in4 peopleEngineers from LayerX15 peopleis seconded.
in-houseCommunication toolfollows the one used in LayerX.approvalThe way of threading is also designed so as not to reduce the sense of speed.
On the other hand, governance, which is important for the financial industry, can be effective.Hours are 9:15 a.m. to 5:30 p.m.Working hours are up to7 hours 15 minutes.It was unusually short for a startup in the launch stage, and from employees”I’m demotivated”There were also voices saying
“Although I am aware that there is a gap in the concept of defensive compliance between large companies and startups,Think of it as the cost of receiving investment and swallow it.』I asked. Compliance is important in finance. We are doing a lot of things, including training,” (Mr. Ueno).
Project selection should be “certain × uncertain”
The government will encourage large companies to invest in startups through open innovation promotion tax systems. In this recession, M&A by large companies will also increase.
Mr. Fukushima thinks that MDM will be useful when startups and large companies collaborate.”textbook”I say that it will be
“One of the things that large companies and startups tend to do is to multiply uncertainties. For example, recently there is a buzzword, ‘I want to do something with ChatGPT,’ and I don’t know the correct answer for business models, user needs, and organization building. Start a business that doesn’t exist.
It is not like that,Multiply the certain and the uncertainWhat is it? Large companies are good at scaling proven business models with power, while startups break through by betting on uncertainties. While doing it, I realized that it is important to combine these things.” (Mr. Fukushima)
In terms of MDM, the asset management business has been established as a business model, and Mitsui has a wealth of experience. On the other hand, selling to individuals as digital securities and digitizing analog business are LayerX’s strengths.”It’s uncertain, but it seems like something that can be solved is suitable for collaboration.”(Mr. Fukushima)
Investing one-third of the workforce for speed
In addition, it is said that “preparedness” is also necessary. Collaboration is costly to agree on,absolute lag in speedtake.
In addition,Persons in charge of new businesses and innovation departments of large companies handle multiple projectsand the startup has time to wait for that decision.
This time, Mr. Ueno from the beginningFocus on MDM with full commitmentIt seems that what he was doing led to a sense of speed in launching the business.
Another startup, LayerX, also took a big risk in investing human resources.
“LayerX has now grown to an organization of about 160 people, but when MDM was launched, it had about 30 employees.
among themsent out about a thirdThat’s right. “this isLayerX’s life-or-death projectTherefore, please go ahead without worrying about other projects.”
I don’t think I would have gotten to where I am today if I had sent one or two people on loan and said, ‘I’ll increase the number of people when the buds appear.’The startup side also needs to take on challenges with considerable determination(Fukushima)
Thanks to this, MDM has been able to get ahead of the new market of digital securities.The real estate digital securities fund formed by the company is now the industry’sJapan’s largestis.
How to develop so-called JTC “not” human resources
However, the results so far have been”Mr. Ueno’s presence is significant.”said the officials. Mr. Ueno’s career is the so-called “JTCIt is completely different from that of “managers”.
Joined Mitsui & Co. as a new graduate after graduating from Kyoto University Graduate School of Engineering.He has also run a real estate-related asset management company.3 companiesWe have launchedListed two companies and acted as CFO himselfAlso.
Looking for more expertise during this hard workGraduate School of Financial Engineering at Hitotsubashi Universityand earned a master’s degree.
Words on the wall are like the financial industry. By the way, the bicycle in the foreground belongs to Mr. Ueno.
after thatStartup investment in Silicon Valley, USAengaged in. It invested in cleantech companies that primarily use renewable energy.
During his 23-year tenure at Mitsui & Co.,Seconded most of 16-17 yearsMr. Ueno, who spent his time”I think it’s better to be seconded to the head office,” he laughs.
“There was a time when a project that I wanted to do before failed at the company.”You were the one who couldn’t pass. The responsibility lies with you, not with the organization. were you really motivated? 』and.
With that experience, MDMI’ll go through it no matter what, I’ll make it a successI worked on it with that in mind.” (Mr. Ueno)
In addition to business selection and culture creation, is it possible for a large company to develop human resources with a “startup mindset” like Mr. Ueno? In addition, collaboration between startups and large corporations, or rather, the future of innovation in Japan may also be at stake.
Source: BusinessInsider
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