Japanese SmartBank raises $20M Series A for its prepaid cards and financial app

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Shota Horiihis twin brother Utah Horii as well as June Taketani co-founder Smartbank in 2019 after selling its previous startup Fablic, a Japanese online second-hand marketplace, to Rakuten in 2016. While working with Fablic, the trio found that many users still use cash to pay and manage their day-to-day finances. The founders wanted to solve the consumer lending problem in Japan and launched SmartBank.

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A Japanese fintech startup said today it has raised a $20 million (2 billion yen) Series A funding round led by Globis Capital Partners with participation from Z Venture Capital, Mitsui Sumitomo Insurance Venture Capital and DBJ Capital. The round also included existing investors, including Global Brain and ANRI.

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SmartBank wants everyone to be able to manage their finances, “from day-to-day spending to planning for the future” by offering its B/43 digital finance management service, which is a Visa prepaid card and personal finance app.

The company is similar to challenger banks such as Brazil’s Nubank and Britain’s Monzo, but its key difference (in terms of functionality) is that it not only targets individuals but also offers joint accounts for couples. In addition, the startup says that it will soon release services for parents and children to manage finances together.

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Banks in Japan do not offer joint accounts for couples. As the number of dual-income households increases in the country, Horia said, it becomes more inconvenient for them to maintain a general flow of money and savings compared to single-income families. The startup has conducted more than 250 user interviews and estimated that up to 15 million dual-income households face household financial management challenges, Horii continued.

“Unlike other countries, traditional banks in Japan don’t offer joint accounts,” SmartBank CEO Horii told TechCrunch. “However, we do not operate under a banking license and do not use a license to transfer funds. We can offer accounts that users can share with their families.”

The latest funding, which brings the company’s total raised to $30 million, will be used to further expand the B/43 service. Users can check all expenses by recording and visualizing them in real time in the app, simply by entering their monthly budget into app B/43 and making payments.

The company claims that the B/43 joint account service retention rate is almost 100% after using the service for three months. Within a year since the launch of B/43 in April 2021, monthly transaction volume reached several million US dollars, according to the company.

The Japanese startup also reports that its total downloads topped 100,000 in December and is now aiming to reach a total of 1 million downloads by the end of 2023. The company did not disclose its valuation and monthly active users (MAU).

SmartBank earns revenue in two ways: the first is the exchange fees that the company receives from Visa every time its users make a transaction using their card. The other is through lending. The startup offers Charge Now, Pay Later, which allows users to borrow up to 50,000 yen (roughly $365) and withdraw the balance from their account. Users repay the borrowed amount with a commission, which is the source of the company’s income, at the end of the next month.

SmartBank aims to expand its services from managing day-to-day living expenses to savings and investments in the medium to long term. The company employs a team of 19 people.


Credit: techcrunch.com /

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