The Second-Biggest IPO Of Japan In 2019

Japan’s second-biggest IPO of 2019 rose on its first day of trading in Tokyo.

The Tokyo Stock Exchange’s Mothers Market witnessed the debut of Japan-based accounting software provider “Freee.” This software startup offers a cloud-based accounting platform for small firms. The company serves over 1 million SMEs across the country and is ranked 5th amongst Japanese startups in terms of valuation.

The day ended at about 25 dollars or approximately 2700 yen, which is up by 35% from the IPO price. This also means that this Tokyo-based firm values more than 1 billion dollars. According to CEO, Daisuke Sasaki, the company plans to use the IPO to expand its user base. He adds that their business is a subscription model, and it costs money to acquire users. However, in the long run, they are looking to make it back from the regular fees.

According to Nikkei, “Freee” filed for this initial public offering on the Tokyo Stock Exchange’s Mother market in November 2019 to provide exits to corporates Mitsubishi UFJ, Line, Life Card, Nippon Life, Sharp, Salesforce, Recruit, and SBI. 

The company was founded by Daisuke Sasaki in 2012, who, before this, was working with Google, where he headed the SMB marketing in the Asia Pacific region. He has also held the position of CFO at Albert Inc. “Freee” offers a platform that allows users to read and scan invoices, sorts these invoices, and automatically creates financial statements. The company has partnered with 270 banks and other financial institutions in Japan and allows users to manage fund movement by integrating with their bank accounts. It works on a freemium model, and its paid plan begins at about 10 USD per month per business.

Their product lineup includes:

• Robust accounting software for corporations
• Cutting-edge HR labor software
• Industry-leading incorporation software
• Simplified accounting and reporting software for individuals
• Comprehensive opening notice creation service
• Cloud ERP for everything your business needs

“Freee” has been growing fast since its launch and is already used by over 200,000 businesses in Japan.

The company has raised a total of $227.9M in funding over 9 rounds. Their latest funding was raised on Aug 7, 2018 from a Series E round. Freee is funded by 15 investors and Life Card Co. and Greyhound Capital are the most prominent investors.

It counts Line Corp. and Recruit Holdings as its shareholders. The firm raised a whopping $8.3M i.e. 1 billion yen from SBI’s FinTech Fund and several other investors in 2016. The company was also a winner of the most prestigious demo event in Japan, Infinity Ventures Summit Launch Pad in 2013.

According to TSE officials, the year 2019 has seen a number listings by startups with new business models. This is a 5-year high for startups like “Freee” that went public in spite of being in the red.