PE-backed WealthNavi soars on Tokyo debut

It is the fourth-largest IPO of the year by a private equity-backed company in Japan. More than $1.6 billion has been raised through 40 offerings year-to-date, up from $1.3 billion from 36 offerings in 2019.

WealthNavi sold 15.6 million shares for JPY1,150 apiece, according to a filing. Its stock opened at JPY2,000 on December 23 and reached JPY2,337 towards the end of the morning session, the maximum permitted single-day increase for businesses of this nature. The company’s market capitalization is now approximately JPY105 billion.

The offering included 13.1 million shares held by existing investors, more than half of them from Gree, Infinity, and Global Brain. Gree took JPY3.46 billion off the table and retains a 3.3% stake. Infinity and Global Brain received JPY2.4 billion and JPY2.25 billion, respectively. Infinity still owns 2.3% of WealthNavi, while Global Brain has 2.14%.

The company’s most recent equity funding round took place in June, with JPY1.81 billion raised at JPY2,553 per share, the prospectus states. There have been several rounds comprising debt and equity since its establishment in 2015 when Infinity and Incubate Fund provided seed capital.

AVCJ Research’s records indicate that JPY4.1 billion was raised in November 2019 from SFV-GB fund – a vehicle launched by Sony Financial Ventures and Global Brain – UTokyo Innovation Platform, Sumitomo Mitsui Trust Investment’s Japan Coin Best, DBJ Capital, Opt Ventures, local incubator Chiba Dojo, SMBC Venture Capital, Resona Capital, Bonds Investment Group, and Mizuho Capital. Several of these, as well as Global Brain in a solo capacity, were repeat investors.

WealthNavi offers a robo-advisor service that conducts fully automated asset management. The company had JPY320 billion under custody across 350,000 accounts of as of December. It invests in over 11,000 stocks in about 50 countries through six or seven exchange-traded funds. Customers pay a fee of 1% of assets, falling to 0.5% for portfolios in excess of JPY30 million.

WealthNavi claims that half of its employees are “manufacturing financial institutions” in that they are engineers, designers, and other professionals focused on product creation. Its robo-advisory services target customers seeking mid- to long-term stability, using algorithms to build optimal portfolios, maintain appropriate asset allocations, and manage risks such as exchange rates.

Revenue came to JPY1.55 billion in 2019, up from JPY881.2 million the previous year. Over the same period, net loss widened from JPY1.72 billion to JPY2.1 billion.

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• Topics
• North Asia
• IPO
• Financials
• Technology
• Japan
• Fintech
• Global Brain Corporation
• Infinity Equity
• Gree Ventures
• The Development Bank of Japan (DBJ)
• Sumitomo Mitsui
• Mizuho Capital
• Resona Capital
• SMBC Venture Capital