ITOCHU Announces Capital Participation in Crowdcredit to Embark on Peer-to-Peer Lending*1 Business
March 2, 2015
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that it has formed a capital alliance with Crowdcredit, Inc. (headquartered in Chiyoda-ku, Tokyo; Tomoyuki Sugiyama, Representative Director; hereinafter “Crowdcredit”), which operates a financing brokerage service that matches those wishing to borrow funds (borrowers) with those wishing to lend funds (lenders). Acquiring nearly 18% of the outstanding shares of Crowdcredit at an approximate expense of more than 200 million yen, ITOCHU will be the second largest shareholder after the Crowdcredit founder.
Crowdcredit, the destination of this investment, responds to the needs of domestic individual and institutional investors wishing for income gains based on interest, instead of capital gains due to transactions in secondary markets, to build their assets by acting as a financing broker between borrowers and lenders, specifically by offering them investment opportunities with high yields in which investors can take part with even a small amount. The funds collected are invested in individuals and small and medium size enterprises in the countries where there is high fund-raising demand via local partner companies. The money collected from investors will be loaned out as contributions to the fund.
In the sector of social funding, peer-to-peer lending has been rapidly growing in recent years. Its total financing amount is forecasted to reach around 100 trillion yen by 2025 and to account for 50% of U.S. and British retail loans. One leading company in the industry that achieved listing on the New York Stock Exchange at the end of last year saw its market capitalization grew to around one trillion yen shortly after its listing and made headlines. Overseas early-bird companies and several domestic business ventures in this sector engage in financing brokerage between borrowers and lenders in the same country, whereas Crowdcredit aims to offer a cross-border service in which it collects money from countries that tend to have a surplus of funds to offer them to European countries and emerging countries with high capital needs.
ITOCHU, with advice and help from Mr. Oki Matsumoto, a former director of the Tokyo Stock Exchange Inc. and incumbent CEO of Monex, Inc., through Crowdcredit shareholder Monex Ventures, Inc., and Mr. Tetsuya Isozaki, a general partner of Femto Growth Capital LLP, which is known for having provided support for the launch and growth of kabu.com Securities Co., Ltd. and mixi, Inc., Crowdcredit will aim to reach a total financing amount of 100 billion yen in 2018 by offering support in Japan for sales, systems development and marketing.
Positively pushing ahead with investments in business ventures in Japan and beyond, ITOCHU defines the FinTech*2 domain as a priority area. ITOCHU will invest in enterprises that create advanced financial services like the one mentioned above to help construct financial system for Japan’s future generations. It will also take advantage of its own global network to spread technologies and services originating in Japan to the world.
Company Profile of Crowdcredit, Inc.
|Company Name||Crowdcredit, Inc.|
|Location||12th Floor, Yurakucho Itocia, 2-7-1 Yurakucho, Chiyoda-ku, Tokyo|
|Major shareholders||Tomoyuki Sugiyama, ITOCHU Corporation, Femto Startup LLP, Monex Ventures, Inc.|
- Peer-to-Peer Lending
This is a method or service of calling for loans through the use of social funding, which is a method of raising funds from users on the Internet or a service that may be used for that purpose. In the category of social funding, it is the approach with the largest market size of around 1 trillion yen on a worldwide basis, excluding the Chinese market, and around 10 billion yen in Japan in 2014.
A term coined by joining Finance with Technology, this refers to innovations based on the integration of financial and information technologies and IT startup enterprises aiming to achieve such innovations.