Rakuten Notches $2.2 Billion With Shares Issued To Walmart, Tencent, Japan Post

Japanese eCommerce and technology giant Rakuten is hoping to notch $2.2 billion with the issuance of new shares to Walmart, Tencent and Japan Post, the company said in a press release on Friday (March 12).

Rakuten said the new funds will be used to scale its operations into artificial intelligence (AI), finance and mobile. The company is issuing a total of 211,656,500 shares at $10.50 per share (¥1,145).

Postal and logistics business Japan Post is anticipated to purchase 131,004,000 shares for an 8.3 percent stake in the publicly-traded company. China’s Tencent, the world’s biggest video game publisher, is expected to take 57,382,900 for a 3.6 percent stake. And U.S. retail behemoth Walmart is reportedly buying 14,536,000 shares for a 0.9 percent stake.

Rakuten and Japan Post are expected to team up for logistics, mobile and payments. Partnerships with Tencent are also being discussed.

“These new investments in Rakuten indicate both high expectations for the growth and impact of the Rakuten ecosystem with the mobile service at its core, as well as great potential for further collaboration with leading companies from the world’s three leading economies,” said Hiroshi Mikitani, Rakuten’s founder, chairman and chief executive officer. He added that the possibility of teaming with Tencent “opens up a broad portfolio of opportunities.”

The company, which was launched in 1997, now has more than 70 businesses and 1.4 billion members worldwide. Rakuten Ichiba is among Japan’s biggest eCommerce sites, yet the company’s valuation is nowhere near that of Amazon. Rakuten’s market value is roughly $16.5 billion, while Amazon’s valuation is in excess of $1.5 trillion.

Martin Lau, executive director and president of Tencent, said Rakuten has developed “a vibrant ecosystem” via membership and rewards, and will soon extend its “unrivaled strength” in eCommerce to FinTech and digital content. “Tencent shares Rakuten’s aspiration of creating value through innovation and empowerment for users and partners. … We look forward to pursuing strategic cooperation across activities including digital entertainment and eCommerce, creating value for users and building the internet ecosystem together,” Lau said.

In November, Rakuten launched a new subsidiary — Rakuten DX — to bring digital transformation to brick-and-mortar stores.

Walmart originally didn’t see a lot of retail success in Japan until it moved into the grocery delivery space in February 2020, in partnership with Rakuten.