TechInAsia for VonDroid.com writes: Skirmishes are breaking out in certain industries for Japanese startups. Everyone wants to be number one but getting the top spot is easier said than done. Competition is fierce, like the see-saw between Gunosy and Smartnews for the nation’s news app supremacy. Over in the world of accounting software for businesses, a new study shows that Freee is the leader, and may not be letting go of that title anytime soon.
According to a report from Digital in Fact, 41 percent of the representative sample of businesspeople use Freee. MoneyForward is usually cited as Freee’s main rival but they lag far behind with 9.7 percent market share.
Despite the big gap, both companies – and new competitors – have plenty of room to grow. Cloud-based accounting only makes up five percent of the accounting services used by local companies. The rest use installed software.
The news, which is sure to empower Freee salespeople trying to hit their year-end targets, helps explain why investors decided to pour an additional US$6 million into the firm after giving it US$8 million just five months earlier.
It’s good to be on top but Freee’s competitors are not going anywhere. Aside from MoneyForward, Accounting SaaS just closed a US$6.6 million funding round.
Use our Search Engine and type the "FREEE" to learn about
Japan's cloud accounting leader Freee.
JT Quigley for TechInAsia writes on "Money Forward":
For this startup, dominance of Japan’s $3.7 trillion personal finance market is not enough
Are people obsessed with money? No. People are obsessed with disposable income. Disposable income is the cash in your pocket after all legally required payments for things like taxes and pension have been deducted from your salary. Disposable income gets you dinner and drinks with friends, extra savings in your bank account, a new TV… or even a chance to re-create the hedonism of The Wolf of Wall Street in the comforts of your own home. With so many options, it is no wonder that planning how to use disposable income is a national pastime the world over. Money Forward founder and CEO, Yosuke Tsuji, created his company to make the process as easy as possible. Judging by the company’s strong user growth – rapidly approaching one million user accounts – he’s on his way to succeeding.
Capturing market share
Established in December 2012, Money Forward entered a growing market. According to OECD figures, Japan’s national disposable income was on an upswing, hitting US$3.7 trillion in 2012. The company seeks to become a one-stop shop for any individual wishing to track and plan their finances. It does this by creating partnerships with approximately 1,400 financial institutions in Japan. Users can then link their financial accounts (banks, credit cards, securities, Coiney, etc.) to their Money Forward account and see the full glory, or sobering reality, of their financial health. Once the user’s financial accounts are linked, any changes to their savings or securities will be pushed to Money Forward where they can be fully analyzed.
Data analysis is another area where Money Forward creates value. As Tsuji explains,
“You can simulate your data from the past six months into the next three years… the customers can see the best card from their data.”
“You can simulate your data from the past six months into the next three years… the customers can see the best card from their data.”
Command one market, conquer the next
The service provides near total-coverage for all financial institutions in Japan. With 1,400 out of 1,585 financial institutions in the Money Forward fold, even users who have never stepped foot inside of a mega-bank can enjoy top-class service and benefits. The message certainly seems to have gotten out, as the company’s free app for Android was rated the number one finance app for 2013 by Google Play. iOS users are also flocking to the service on iPhone and iPad. In total, Money Forward expects to announce the acquisition of its one millionth user this summer. Tsuji asserted that this milestone will cement the company’s top position in Japan as measured by user accounts.
Despite the company’s success as a personal finance management system, it also started offering enterprise services in January 2014. It currently offers a cloud accounting service covering tax accounting. Tsuji’s rationale for this strategy is that traditional face-to-face accounting services are destined to be digitized. He noted that, “Microsoft Outlook was replaced by Gmail and local servers were replaced by Amazon Web Server database, so accounting services, accounting systems will be replaced by a cloud system.” Tsuji’s aim is high – to turn Money Forward into the number one cloud service for business. Though the functionality is currently limited to just accounting, additional enterprise-focused services for invoices, salary payment, and expense reports are expected to be released in the coming months.
The new services dovetail perfectly Tsuji’s ultimate goal. He says, “I want to make the world [without] manual input. Just connect everything.” Competition in this market is fierce and its burgeoning rival Freee is making strong inroads as well. Seeing if Money Forward has the ability to replicate its success in its intended enterprise expansion bears watching as 2014 progresses.
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