Goodwater Capital also invested in Kyash’s Series B Round. Greenspring Associates is a global venture capital investment platform managing assets in excess of $10 billion. Other investors include U.K. growth equity investment firm Greyhound Capital; U.S. venture capital firm Altos Ventures; global investment firm Partech Partners; U.S. FinTech venture capital fund Broadhaven Ventures; U.S. venture capital firm Tekton Ventures; and Rahul Mehta, managing partner of DST Global.
This is the first time Greenspring Associates, Partech and Broadhaven Ventures have invested in a Japanese startup. Previous investor JAFCO also participated and remains committed to supporting Kyash’s vision.
The FinTech has raised $73 million to date to expand its digital banking offerings. Past investors include Jafco Co. and Japanese banks Mizuho Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc.
“I am delighted to announce Kyash’s partnerships with these global investors as a result of the company’s progress in product development and significant user traction in Japan amid the uncertain market conditions resulting from the widespread effects of the pandemic,” said Kyash Founder and CEO Shinichi Takatori.
“We are confident that our focus on developing proprietary payment technology and strategic merchant network partnerships continues to bring value to users and addresses the need for remote financial transactions in a digital economy,” he added.
Japan has been moving to a cashless society since October 2019 when the government started partially subsidizing digital payments. In the wake of COVID-19, this movement has taken on greater urgency. Worldwide social distancing mandates are making cashless payments more of the norm instead of the exception.
Kyash’s payment solution connects to Visa’s platform so it can issue cards while also customizing business services.
Founded in 2015, the FinTech is one of many digital financial institutions — like challenger banks or neo banks — hoping to entice legacy banking customers with higher interest rates or lower fees. The online-only ventures typically do not have physical retail locations.
“It is a vote of confidence in our business, especially at a time like this,” Takatori told Bloomberg. “Our investors believe we can be the leading challenger bank in Japan.”
He said the company differs from its rivals in that many of them are only looking to re-direct people to other services. “Unlike some of our competitors, we are not doing this to funnel people into some other service or try to sell them a mobile plan,” he said. “This is our main business.”
While Kyash isn’t a bank, it has applied for many licenses in Japan that could enable it to offer features in the style of banking such as money remittance, ATM withdrawals and checking accounts.