Friday, December 19, 2014

With $12.6M more in the bank, MoneyForward is ready to push adoption of cloud accounting

David Corbin for TechinAsia writes: MoneyForward, an online accounting startup servicing both individuals and companies, announced today that it raised a series B round of JPY 1.5 billion (US$12.6 million). Credit Saison, software publisher Sourcenext, Jafco, Mitsui Sumitomo Insurance Venture Capital, GMO Venture Partners, and Dentsu all participated in the round, with Jafco being a repeat investor.
The funding comes at an opportune time. Just last week, a report was released that namedFreee, another online accounting startup, the leader in Japan’s smalll cloud accounting sector. Regardless, Freee is formidable, and has also been busy wooing investors, bagging a total of US$14 million in new funds this year.
The stage is set for a tough battle in Japan’s already crowded startup fintech sector. Firms likeMakeLeaps and MoneyTree are also competing for similar customers, but MoneyForward founder and CEO Yusuke Tsuji is feeling confident. According to Tsuji, business partnerships are especially crucial to its success at this stage.
MoneyForward has already landed key partnerships with Yahoo Japan and Gunosypreviously, and expects to add on a few more from its among its new investors. Credit Saison, Japan’s third largest credit card issuer, Mitsui Sumitomo Insurance, and GMO (likely with the Payment Gateway subsidiary) will likely all play a larger role in MoneyForward going forward. Sourcenext also holds much promise due to that firm’s relationship with nearly omnipresent big box electronics stores Bic Camera and Yodobashi Camera.
Hence, the confidence. Tsuji, who previously rose through the ranks of Monex, a financial services firm born in 1999 and currently sporting a US$675 million market cap, knows how to play this game and learned from tried and true entrepreneurs. His network matches up very well with Freee’s, which features startups like Base and Coiney along with larger players like Square and Google Apps for Business.
“I don’t think the issue is about how much market share Freee has,” Tsuji says, “In any case, [business use of] cloud accounting is only at five percent. The real issue is getting adoption in general.”
On that point, MoneyForward has a strong card to play. It started out as a personal finance app, and enjoys the top position in Japan, with 1.8 million users. On the other hand, Freee started out as a B2B service, so while MoneyForward fans can bring the service to their companies, Freee has no such base to drawn on.
With a healthy business on the personal finance side, MoneyForward is ready to put its strength into its corporate sales. Tsuji says the company’s revenue is currently split almost evenly between the two sides, but growing the corporate brand is his first priority now.
In the past six months, the 50-person startup has added tax return and invoicing functions to the base cloud accounting service. In the near future, Tsuji promises they will be joined by an online payment support function as well.


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