By Peter Rothenberg for TechInAsia
Japan’s Money Forward, a personal financial management and cloud-based accounting software service, today announced a series D round of funding today for roughly US$11 million.
Investors include Mizuho Capital’s fintech fund and Isetan Mitsukoshi Holdings. Current investors Fenox Venture Capital and Toho Bank also participated with anticipation of a global expansion. Local banks and new business partners North Pacific Bank, Gunma Bank, Fukui Bank, and Shiga Bank got into the action as well.
Although the amount raised was less than last year’s US$13.3 million, CFO Naoya Kanesaka confirmed that this is an up-round with a higher valuation.
Money Forward offers several services. Besides accounting, users can do payroll, payment collection, expense reporting, send invoices, and of course see financial projections among other things.
The service is currently used by four million individuals and over 500,000 businesses in Japan.
He wants to invest in more fintech services in Asia and encourages entrepreneurs to reach out.
There are a handful of such services like Moneytree, Zaim, and Freee in Japan, but Money Forward now has the backing of several financial institutions and raised a total of almost US$48 million at today’s rate.
The company is keen to promote fintech in Japan and is actively participating in fintech communities and government committees. Founder and CEO Yosuke Tsuji says he wants to invest in more fintech services in Asia and encourages entrepreneurs to reach out. They have already invested in local players like robo-advisor Money Design.
“Local banks are a big part of local infrastructure,” says Yosuke. Money Forward’s expansion strategy includes working closely with these banks. CFO Naoya Kanesaka adds that local banks are working mostly with small businesses which are not using a lot of technology. This is where Money Forward wants to help. Through partnerships, the company is able to approach small business owners from all sides by supporting banks, accountants, and business owners with separate services and new technologies like smartphone applications.
Still, for higher adoption of Money Foward and other fintech services, the Japanese will need to get on the internet banking bandwagon. Naoya sees the low adoption of online banking in Japan as one hurdle and cites that only 30 percent of people currently use the option.
“It’s the internet, so we should connect to each other by using APIs,” says Yosuke.
Money Forward is already part of a trial with NTT Data to access banking APIs but Naoya explains things are still rather closed. “So far it seems like they are trying to work with limited partners that they can trust.”
The Financial Services Agency, however, though is encouraging more collaboration between banks and startups. A big change came earlier this year when the five percent cap on bank ownership of non-financial companies was removed.
With more money flowing and changing laws, fintech is poised to be the hottest tech vertical in Japan this year.
First appeared at TechInAsia