Japan has been the birthplace of traditional arts and crafts since ancient times. Craftmanship, meticulous attention to detail and balance of design and functionality have contributed to creating unique Japanese products like pottery, traditional fabrics, washi (paper), woodwork, glasses, bento-boxes and more.
This craftsmanship continues to be passed along from generation to generation and live on in modern Japan. However, the craftsmen and women, who do not always have the skills or tools to be influential merchants, have often been left behind in the rapidly evolving business environment in the 21st century.
In recent years, a growing number of e-commerce entrepreneurs have started to develop their own products and brands in response to a shift in consumer demand from cheap, mass-produced goods to diversified products that meet one’s unique needs and lifestyle.
Forest, a Japanese e-commerce aggregator, seeks to identify sustainable, high-quality products and brands that embrace the spirit of Japan and help them grow and enter the global market by using the power of technology.
Forest announced today it has raised approximately $8 million (900 million yen) of seed round led by The University of Tokyo Edge Capital Partners (UTEC) and Nordstar Partners.
The startup will use the new capital to acquire more than 300 Japanese e-commerce brands that have been carefully crafted and curated by entrepreneurs. Forest will apply digital marketing strategies at scale, optimize sales and enhance inventory planning through data analytics, as well as support cross-border e-commerce expansion.
Forest is currently in the process of finalizing its first acquisition. It will continue to look for brands that generate sales between $1 million and $5 million and target to acquire companies with more than $10 million of sales next year, said CEO of Forest Shingo Yuhara told TechCrunch.
It also plans to raise around $20 million to $30 million debt and equity capital of Series A, targeting the first half of 2022, Yuhara said.
Forest looks at marketplaces, including Amazon, Rakuten, Zozotown, Yahoo Japan sellers, Shopify and more.
Forest, founded in July by Yuhara and COO Masa Mishizawa, will compete with other e-commerce aggregators like Rainforest, Una Brands and Thrasio in the global market. Forest said it is the first pure aggregator dedicated to the Japanese market. Given that Forest initially focuses on the Japanese market, it does not see Rainforest and Thrasio as its pure competitors, Yuhara said.
Thrasio set up a Japanese office in March to acquire Japanese brands and products sold on Amazon Japan and other e-commerce platforms.
The Japanese e-commerce market was estimated at $165 billion (19 trillion yen) as of 2020, according to a report by Japan’s Ministry of Economy, Trade and Industry.
“[The] investment into Forest is one of our largest seed round investments within the IT sector. In my previous life, I managed my family-owned apparel business and personally experienced the pains and limitations of a small business. I strongly believe that Forest can solve these problems and capitalize on the potential of these businesses through the power of technology," said partner of UTEC Hiroyuki Sakamoto. "We look forward to working with the experienced Founders who seek to challenge this attractive market opportunity and we feel privileged to participate as co-lead investor.”
“We are excited to be investing in Forest that is well-positioned to take advantage of the large opportunity in acquiring and scaling niche brands in Japan,” said managing partner Ole Ruch of Nordstar.