Japan's Mercari set for $1.2b IPO
Japanese consumer-to-consumer marketplace Mercari – which has several VC backers – is set to raise JPY130.5 billion ($1.18 billion) in its domestic IPO after pricing the offering at the top end of the indicative range.
The company will sell about 43.5 million shares at JPY3,000 apiece, according to a filing, having earlier set a range of JPY2,700-3,000. The initial guidance indicated that 40.7 million shares would be sold at JPY2,200-2,700, comprising 18.2 million new shares and 22.5 million shares held by existing investors. Underwriters have fully exercised the overallotment option, taking the new issue to 20.9 million shares.
Mercari’s venture capital investors – Global Brain, East Ventures, Itochu Technology Ventures, GMO Venture Partners, World Innovation Lab (WiL), and Globis Capital Partners – still stand to receive around JPY33.7 billion by selling some of their shares. There will also be partial exits for strategic backers such as advertising player United and Mitsui & Co.
East Ventures was Mercari’s first institutional investor, providing JPY50 million in seed funding not long after the company was founded in 2013. By the Series D round in 2016, which was co-led by Mitsui, Mercari’s valuation had surpassed $1 billion, making it the first Japanese unicorn.
The company, which was established by Shintaro Yamada, formerly Japan general manager for Zynga, positions itself as C2C only and mobile only. Vendors take pictures of the items they want to put up for sale and list them on the platform within two minutes. They then receive a barcode, attach it to their package, and drop it off at Yamato, Mercari's logistics partner, or Japan Post.
While most vendors on eBay and Yahoo Auction are small business sellers who attract buyers looking for the cheapest possible price, Mercari monitors its vendors to ensure they are individual sellers. The intention is to create a "flea market" environment populated by consumers who are primarily there for the joy of shopping. The stickiness of the app allows Mercari to charge a 10% commission per transaction. Its monthly gross merchandise value (GMV) was about JPY10 billion in 2016.
Mercari has also sought to expand into other markets, launching a US operation in 2014. Its app has been downloaded 28.2 million times in the country. The company didn’t take a commission on US transactions with a view to building up a local following, but that policy changed last year.
Overall sales revenue came to JPY22 billion for the 12 months ended June 2017, up from JPY12.3 billion the previous year. Over the same period, the company’s net loss widened from JPY348 million to JPY4.2 billion, largely due to increased advertising and marketing expenditure.
More on North Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.