Kyash raises $45 million to drive Japan’s cashless efforts during coronavirus crisis

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Japanese digital wallet provider Kyash has raised $45 million in a fundraiser to expand its mobile offerings to help Japan convert to a cashless society during the coronavirus outbreak.

The $45 million Series C round was co-led by Goodwater Capital, which had also invested in Kyash’s Series B round, and Greenspring Associates. Additional investors included Greyhound Capital, Altos Ventures, Partech Partners, Broadhaven Ventures, Tekton Ventures and the Japanese private equity fund JAFCO. The funds will be used to fuel Kyash’s growth strategy and expand further into the mobile banking space.

“We are confident that our focus on developing proprietary payment technology and strategic merchant network partnerships continues to bring value to users and addresses the need for remote financial transactions in a digital economy,” said Shinichi Takatori, founder and CEO of Kyash, in a press release.

Japan has created an initiative to raise its number of cashless transactions by offering a nine-month-long sales tax rebate for cashless payments conducted in stores. The program began on Oct. 1, 2019, coinciding with a sales tax increase to 10%, up from 8%. The rebate program, which ends June 30, is designed to double Japan’s rate for cashless payments to 40% of all transactions by 2025, up from 20% in 2016, according to Japan Times.

Kyash’s long-term goal is to become a full technology stack mobile banking business in Japan.

Additional investors from prior fundraisers in the Tokyo-based startup include several of the large Japanese banking groups such as Sumitomo Mitsui Banking Corp., SMBC Venture Capital, Mitsubishi UFJ Capital and Mizuho Capital, as well as venture fund manager SBI Investment and the general trading company Itochu Corp. Kyash announced that it has raised a total of $73 million in funding since it was founded in 2015.

Last October Kyash launched a Visa card issuer processing platform service called Kyash Direct, which provides cloud-based spend management services for corporate clients. The platform uses a Visa Commercial prepaid card and an API that provides corporate clients with the issuer processing technology and license to issue Visa cards under their own brand.

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Digital payments Mobile wallets Venture funding Japan