Japanese payments app and putative challenger bank Kyash has raised $14 million in a Series B funding round co-led by Mitsubishi UFJ and Goodwater Capital, the VC firm that recently participated in Monzo's £113 million raise.
Kyash currently offers a prepaid-debit based mobile wallet app that allows consumers to make payments at Visa merchants and peer to peer transfers, but the firm has set its sights on attaining a banking licence which would allow it to offer current accounts and money remittance services.
Two-year old Kyash is riding a Government-inspired push to raise the share of cashless payments as part of an effort to better to serve foreign visitors who prefer to use credit or debit cards. The government’s goal is to increase cashless payments from a lowly 20% to a 40% market share by 2025. As part of this initiative, the Ministry of Economy, Trade and Industry intends to launch a Rebate Project for consumers who use cashless payments starting on 1 October, 2019. Kyash has been named a payments provider for the Project.
“The integration of finance with technology coupled with changes in the regulatory environment in Japan are leading to new conceptualizations of money and financial services for consumers,” says Eric Kim, managing partner at Goodwater Capital. “As Japan's nearly $3 trillion retail market transitions to a cashless society, fresh approaches like those of Kyash will not only facilitate the move away from notes and coins but also allow greater flexibility in receiving salaries and compensation, among other innovations.”
The latest round brings Kyash's total funding to $26 million, and with the addition of Mitsubishi to previous investors SMBC and Mizuho means the startup now has the backing of the country's three largest banks.