Rare Japanese unicorn Mercari targets rapid U.S. expansion
TOKYO (Reuters) – Japanese flea market app operator Mercari Inc targets rapid expansion in the United States, its founder and chief executive told Reuters on Monday, after a recent funding round boosted its value beyond $2 billion.
Mercari offers an online marketplace for individuals to trade used items primarily through a smartphone app in Japan, Britain as well as the United States, where its business is led by former Facebook Inc (O:) executive John Lagerling.
Founded in 2013, Mercari is a rare example of a Japanese unicorn – a startup with a valuation in excess of $1 billion.
“We can’t be successful globally without success in the U.S.,” Shintaro Yamada, 40, said in an interview. “If a service is accepted in the U.S., it tends to become universal.”
Mercari raised 5 billion yen ($47 million) last month giving it a valuation of 252 billion yen, double that of its last major funding two years ago when investors included Japanese trading house Mitsui & Co Ltd (T:) and Development Bank of Japan. It has not disclosed backers of its latest funding round.
The firm applied to list on the Tokyo Stock Exchange in July and is also widely expected to conduct an initial public offering this year to fund overseas expansion. Yamada declined to comment on timing.
In the United States, Yamada said Mercari “has no direct competitor” concentrating exclusively on the peer-to-peer resale of everyday goods, unlike firms such as eBay Inc (O:) which is also used by businesses or Poshmark Inc which focuses on fashion.
The United States, home to tech giants such as Amazon.com Inc (O:), has long been a challenge for Japanese internet firms.
The largest Japanese e-commerce firm, Rakuten Inc (T:), has been relying on acquisitions for its U.S. market expansion, including the 2014 purchase of San Francisco-based rebate website operator Ebates Inc.
Line Corp (T:), Japan’s biggest messaging app operator by active users, narrowed its focus to Asia after being eclipsed by Facebook’s Messenger and WhatsApp.
“I know it won’t be easy,” said Yamada, who founded Mercari after selling his first startup on social gaming to Zynga Inc (O:). “But perhaps others have not tried enough times.”
Yamada hired Lagerling last year, tasked with localizing the Mercari marketplace in the United States. The U.S. team now has about 100 employees, many locally hired, compared with 600 in Japan.
The Mercari app has been downloaded over 30 million times in the United States, versus 60 million in Japan.
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