Kyash Inc. creators of the Kyash wallet app and payment platform Kyash Direct, today announced that it has raised JPY1.5 billion, or approximately $14 million in Series B funding. The round was led by Goodwater Capital, a premier global consumer technology firm whose principals’ previous investing experience includes Facebook, Twitter, Kakao, Spotify and Monzo, as well as Mitsubishi UFJ Capital Co., Ltd. Additional investors include leading Tokyo-based firms and companies such as Toppan Printing Co., JAFCO Co., Ltd., Shinsei Corporate Investment Limited and SMBC Venture Capital Co., Ltd. The round brings Kyash’s total funding to nearly $26 million or JPY 2.8 billion.
Funding for Kyash comes as Japan attempts to move its citizens to a world beyond cash. Despite being one of the most technology-savvy countries in the world, only 20 percent of payments in Japan are cashless, which lags countries such as South Korea (90 percent cashless), China (60 percent cashless), and the U.S. (45 percent cashless), according to the Ministry of Economy, Trade and Industry “Cashless Vision” report. While Japanese consumers have traditionally preferred to stick to notes and coins, the government seeks to serve foreign visitors who prefer to use credit or debit cards. The government’s goal is to increase cashless payments to 40 percent by 2025 through its Cashless Vision initiative. To this end, the Ministry of Economy, Trade and Industry will launch a Rebate Project for consumers who use cashless payments starting on October 1st, 2019. Kyash has been named a payments provider for the initiative.
“The integration of finance with technology coupled with changes in the regulatory environment in Japan are leading to new conceptualizations of money and financial services for consumers,” said Eric Kim, managing partner at Goodwater Capital. “As Japan’s nearly $3 trillion retail market transitions to a cashless society, fresh approaches like those of Kyash will not only facilitate the move away from notes and coins but also allow greater flexibility in receiving salaries and compensation, among other innovations. We look forward to helping Kyash aggressively scale to reach its potential to fundamentally change financial transactions in Japan.”
Kyash is poised to become part of a powerful, growing class of challenger banks that offer an alternative to traditional banks and streamline the banking process. Kyash developed a value transfer platform that has since become the fastest growing issuing and processing technology company to obtain a Visa principal license, doing so in less than two years since its launch. It has provided services in partnership with Visa since the launch of the company’s Kyash wallet app in April 2017.
“Kyash has created a platform that will take Japanese consumers into the cashless era and beyond,” said Shinichi Takatori, Founder & CEO of Kyash. “I am delighted that investors both in Japan and abroad have recognized our achievements over these past two years. We believe Goodwater will provide immensely valuable insight as we evolve our platform to provide more financial freedom and flexibility to the people, which will in turn have a positive global impact.”