Fidelity Invests in Japanese Startup RakSul Before IPO

(Bloomberg) -- RakSul Inc., a Japanese printing startup that's seeking to go public, raised about 2.1 billion yen ($21 million) from investors including Fidelity.

Fidelity and five other investors including Development Bank of Japan Inc. and advertising agency OPT Holding Inc. bought new shares in the Tokyo-based company, RakSul Chief Executive Officer Yasukane Matsumoto said in an interview this week. It's the first Japanese private-equity investment by mutual funds managed by FIL Investments (Japan) Ltd., he said.

Seven-year-old RakSul, which connects clients with printing companies, was introduced to FIL Investments on referral from a Morgan Stanley banker, said Matsumoto, 31, a former A.T. Kearney consultant. His firm's total revenue increased 50 times in the three years ended July, he said, declining to provide a total or comment on profit.

“Fidelity's participation in this financing bodes well for our capital policy after the share listing,” Matsumoto said. “If the money flow from global institutional investors into ventures accelerates, that will help the business ecosystem for Japanese startups.”

Board Member

RakSul and Development Bank of Japan announced the capital increase on Thursday, and a DBJ representative will act as a board member at the firm, the printing company said in a statement.
 
It's the fifth capital increase by RakSul. The company will use the proceeds to improve e-commerce and logistics for its printing and posting businesses and plans to double staff from 50 in the mid-term, the CEO said. Global Brain Corp., GMO VenturePartners and Global Catalyst Partners Japan also invested in RakSul.

RakSul now has about 300,000 clients, mainly small businesses and individuals that are seeking low-cost printing solutions, according to Matsumoto, who estimates the Japanese printing industry is worth 6 trillion yen. Rather than do the printing itself, it helps clients with designs using cloud computing and connects them with manufacturers.

The value of commercial printing in Japan increased 7.9 percent last year to 147.4 billion yen, according to the Ministry of Economy, Trade and Industry.

RakSul has hired a brokerage to advise it on the possible IPO, Matsumoto said, without naming the firm. It hasn't decided when it might list.

To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net. To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Russell Ward, Darren Boey