Japan's Mercari buys VC-backed e-commerce player
Japanese e-commerce company Mercari has agreed to acquire domestic competitor Zawatt, setting up an exit for a number of venture capital backers.
Investors in Zawatt include CyberAgent Ventures and Net Capital Partners, which joined a $200,000 seed round in 2011. Mizuho Capital and SMBC Venture Capital added to this with an undisclosed commitment in 2012.
IMJ Investment Partners, MS Capital and Susquehanna Asia Investment also backed the company in a $2 million Series B round in 2015. Equity stakes and financial details of the exit have not been disclosed. The transaction is expected to be finalized within the month.
According to a statement, Mercari will further its customer-to-customer (C2C) online retailing business by incorporating Zawatt's e-commerce brand Smaoku and creating new services. Both Mercari and Smaoku operate flea market shopping apps. Zawatt also operates platforms for social messaging, including a karaoke-themed app.
Mercari was said to be Japan's first start-up to achieve a valuation in excess of $1 billion last year after it received a JPY8.4 billion ($74 million) Series D round led by Mitsui & Co. The investment also included participation from Development Bank of Japan and Sumitomo Mitsui Trust Bank's Japan co-investment program alongside previous backers Globis Capital Partners, World Innovation Lab (WiL) and Global Brain.
The company's development reflects improved investor confidence in the "sharing economy" as a growth segment within Japan's difficult e-commerce space. Other investment in domestic C2C shopping businesses includes a JPY1.1 billion round led by Globis last year for Creema, a marketplace specializing in handmade items.
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