The new era of tech-enabled banks is coming, even in regulation-heavy Japan. Kyash, a fintech business with visions on becoming Japan’s initially challenger bank, stated now it has raised $14 million to continue its expansion.
To be clear, Kyash isn’t a bank. However. But it is presently applying for a host of licenses in Japan that could enable it to supply banking-style attributes like checking accounts, ATM withdrawals and funds remittance. Appropriate now, it is a payment app that presents a connected Visa card in the style of Monzo, N26, Revolut (which has a Japan license) and other individuals of that ilk.
The startup was founded in 2015 in Shinichi Takatori, a former banker and management consultant who saw the prospective to merge tech and finance.
“I really noticed that information and communication has become ubiquitous but money itself hasn’t changed for a long time,” Takatori told TechCrunch in an interview.
The business took some time — two years — prior to it released a customer item, but it speedily tied up with Visa to supply a prepaid debit card that connects to the Kyash app. That offers added benefits like immediate payment notifications, clear balance and reduced costs for overseas spending, even though charges are born by merchants rather than customers. They could appear elementary now, but they are nevertheless not normal amongst Japan’s regular banks, Takatori explained.
The business declined to share its user numbers, but Takatori stated that this new round of funding — Kyash’s Series B — is a validation of the progress it has created.
The $14 million investment is co-led by Goodwater Capital, a U.S. investor that has backed fintech startups like Monzo, Stash and Toss in Korea, and Mitsubishi UFJ Capital, the investment arm of Japan’s biggest bank.
Mitsubishi’s involvement implies that Kyash counts Japan’s 3 biggest banks as investors, with SMBC, Mizuho possessing preceding place funds into the business. Other people that took element in this Series B include Toppan Printing, JAFCO and Shinsei Corporate Investment Restricted.
So lots of banks on the cap table could appear like a strange factor for a disruptor — let alone the banks, which have a tendency to behave territorially — but Takatori believes that there’s the prospective for cooperation, not to mention that it will assistance the startup with its licensing efforts. Currently, he revealed, Mitsubishi plans to integrate its card with the Kyash app to give its clients with the ideal of each worlds.
“We’re not right here to win more than current banks, but rather inform [them of] how funds ought to perform in subsequent decade,” explained Takatori. “So why not collaborate in some way.”
There’s also the reality that, even with a license, Kyash and other individuals are unlikely to be capable to supply complete banking solutions. That implies they will have to serve as complementary offerings to the business, which would most likely imply that cooperation is fantastic — important — for each sides.
But, beyond the customer play, a notable piece of Kyash’s company that has investors excited is its B2B payment company.
The business created its personal payment processing method to lower charges, which is a single purpose why it took time to launch. Thanks to a tie-up with Visa, it presents each issuing and processing of prepaid Visa cards to fintech corporations in Japan that want to go down the payment route.
That’s increasingly common provided the government push to make the nation a “cashless society” ahead of the 2020 Olympic Games subsequent year. It could also appeal to crypto corporations in Japan, which presents the globe’s most robust licensing, who want to stick to the instance of the Coinbase card in Europe or startups like Crypto.com and TenX which supply equivalent prepaid cards.
Takatori stated Kyash is “in discussions” with crypto corporations, but that it has not created a selection on how to proceed however. The business is also eying prospective overseas expansions, even though that is some way down the line.
“We have open eyes for globalization, it’s just a matter of when,” he told TechCrunch. “We nevertheless have a far way to go [in Japan, but] maybe right after the Olympics.”
Additional pressingly, he sees the business seeking to raise a “pretty quick” Series C round to give it acceleration into subsequent year. That’s most likely to go to much more expansion and user acquisition considering that the licenses the startup has applied for are unlikely to be granted this year.