INSUBCONTINENT EXCLUSIVE:
Japan-based accounting software company Freee, one of the country most-prominent startups,has raised a $60 million Series E funding round as
it bids to expand its services into other areas of management for its customers.
Freee was founded six years ago — we wrote about the
startup when it raised a Series A in 2013 — which makes it one of the ‘oldest& startups in Japan, while this round is also a large one
Japan startup ecosystem has a culture that encourages founders to take their companies& public earlier than in most parts of the world, to
mitigate some risk, but there are signs of alternative approaches that include this round and of course the recent IPO of Mercari, which
went public this summer and raised over $1 billion.
Japan is a country that respects precedent a lot,& Freee founder and CEODaisuke Sasaki
told TechCrunch in an interview
&Having present cases will change [the culture] a lot, we are staying private and investing in growth
Theecosystem isn''t changing [yet] but [startups, founders and VCs] now have more options.
Free was one of the first Japanese startups to
raise from overseas investors, a move that helped get Japanese VCs interested in enterprise and Saas, and this time around it has pulled in
capital from a bunch of big names: Chat app company Line,Mitsubishi UFJ Financial Group (MUFG) — Japan largest bank — consumer credit
firm Life Card and &several [unnamed] internationalinstitutional investors.
DCM and Infinity Investments are among the startup earliest
backers.
Today, Freee offers cloud-based accounting and HR software and itclaims to have over one million business accounts
It has over 5,000 certified accountant advisors — who help it reach new customers and also use it for their own work — and the company
said that over 3,500 apps and services, including mainly financial products, are integration with its software.
Going forward,Sasaki — who
is a former Googler —said Freee will use this new capital to build out an API ecosystem to enable more integrations — some of its
practical ones right now include Slack and Salesforce — while it is planning a major collaboration with Line to allow Line business
customers to integrate their use of the app with Free, while it is exploring how it can collaborate around Line Pay.
Freee founder and
CEODaisuke Sasaki
Freee is also focused on expanding the scope of its services to branch out into products that help with more general
management and operational tasks.
We want to focusnot only on back office but also to add value to customers to make their businesses better
throughdashboards, reporting and insight
Customers who use the [existing business] reports grow faster
Our vision is to give much better insight and business advice through AI [and] to do that we need more data, not just back office but front
line too,&Sasaki said.
Finally, the startup is exploring ways it can enable banks and financial organizations to work more closely with its
Already customers can share data within Freee to banks for assessment for loans and other credit products, and the company is exploring the
potential to introduce a marketplace that would give its customers a place to scout out financial products at more preferential
rates.
Initially we focused on small business but now our biggest customers have a couple of hundred employees so we are going
upmarket,&Sasaki told TechCrunch.
One area Freee won''t be moving into is overseas markets
Yet at least.Sasaki explained that the company wants to build out that vision of an expanded ecosystem of connected services and more
in-depth business tools before branching out into new countries.
SmartHR, a younger rival to free which specializes in HR as the name
suggests, raised $13.3 million earlier this year to push on into areas such aspayroll and more
That could begin to pose a threat to Freee, particularly sinceSmartHR a developer platform to hose third-party applications and services.
