Japan FinTech Observer #140

Welcome to the one hundred fortieth edition of the Japan FinTech Observer.

Congratulations to the team at Wise, who became the first money transfer operator to complete integration with the Zengin interbank-settlement network. The timing could not have been better, as we are spending this week in Estonia, courtesy of Enterprise Estonia, to assist with building FinTech bridges to Japan. We will have a lot to share next week!

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Saison Capital and Taisu Ventures participate in Pruv Finance's Pre-Series A; estie raises JPY 2.2bn debt financing; Resona Bank and Fivot establish "RFC Venture Debt Fund 1"; Incubate Fund Asia is kicking off a fundraising spree with its fourth India-focused seed fund
• Insurance: Fujitsu has launched the Japan Edition of SAP Fioneer Cloud for Insurance
• Banking: Credit Saison Second Quarter Financial Results; Raksul Group launches financial platform "Raksul Bank"; Money Forward functions to be integrated into SMBC Bank and Sumitomo Mitsui Card apps
• Payments: Sony Bank aims become the first Japanese company to issue and distribute a dollar-denominated stablecoin in the United States; Wise becomes first money transfer operator to complete Zengin integration; Shinoken Group and JAPAN POST BANK start tokenized deposits PoC; Suica & PASMO evolve - introducing teppay
• Capital Markets: Alpaca launches US stock execution service for SBI Securities
• Digital Assets: THXLAB and TOPPAN Digital provide dedicated Layer1 blockchain for AVATECT
• The Last Word: A spendy stimulus could test the Bank of Japan

Venture Capital & Private Markets

• Saison Capital and Taisu Ventures participate in Pruv Finance's Pre-Series A: Pruv Finance has completed its USD 3m Pre-Series A round, led by UOB Venture Management, with participation from Saison Capital, Taisu Ventures, Spiral Ventures, and Royal Group; this funding accelerates Pruv Finance's mission to build the first compliant RWA infrastructure that enables seamless, on-chain distribution of tokenized assets
• estie raises JPY 2.2bn debt financing: estie, which provides multiple services centered on "estie Market Research," Japan's largest commercial real estate data analysis platform, has concluded financing agreements totaling 2.2 billion yen with four financial institutions: Shoko Chukin Bank, MUFG Bank, Resona Bank, and Japan Finance Corporation; this includes long-term loans and long-term commitment lines; through this debt financing, combined with equity raised in the Series B round, the company has secured over 5 billion yen in total standby capital

New Funds

• Resona Bank and Fivot establish "RFC Venture Debt Fund 1": Resona Bank and Fivot have jointly established the venture debt fund "RFC Venture Debt Fund 1 Limited Investment Partnership", with the aim of expanding financing for domestic startup companies from seed to middle stage; Resona Bank, which began handling venture debt in October 2023, and Fivot, which possesses expertise in innovative AI credit models and data analysis utilizing LLMs, will leverage their know-how to strengthen startup company support and stimulate the domestic venture market
• Incubate Fund Asia is kicking off a fundraising spree with its fourth India-focused seed fund; it will launch with an initial corpus of $60 million, up from $30 million in the last fund, and the fundraising process is slated to begin next month; in parallel, the firm is evaluating a second vehicle with Japan's Sumitomo Mitsui Financial Group, targeting a corpus equal to or slightly higher than its previous $200 million fund; this vehicle is expected to hit the market in six to nine months

Not FinTech

• EnerBank Raises Series B Funding of JPY 820m: EnerBank, an energy tech company in the fields of renewable energy and decarbonization, has conducted a third-party allotment of new shares in its Series B round, with SMBC Venture Capital, Mizuho Capital, Mitsubishi UFJ Capital, and The Dai-ichi Life Insurance Company as new underwriters; this brings the total amount of Series B funding to 820 million yen, including the 580 million yen raised at the first close; in this round, SMBC Venture Capital invested in EnerBank as part of its impact investment program, and EnerBank was recognized for the social impact of its goal to "create an energy platform that accelerates decarbonization for businesses and communities"

Report

• PitchBook - Japan’s VC cosystem: High Growth & SaaS Leadership: PitchBook has released its Global VC Ecosystem Rankings (Q4 2019 to Q3 2025), providing a data-driven look at where the world’s venture capital is flowing; while the United States continues to dominate the top charts, the data reveals a compelling story for Japan, highlighting a period of significant momentum and specific vertical strengths that set it apart from its Asian peers; in the national rankings, Japan has secured a strong position as the 5th ranked country in the world with an Overall Score of 57.5

Insurance

• Fujitsu has launched the Japan Edition of SAP Fioneer Cloud for Insurance, a next-generation platform designed to support core operations for insurers in Japan; the new edition builds on SAP Fioneer’s global platform and incorporates Fujitsu’s functions, templates, and data-linkage capabilities aligned with Japanese regulatory requirements and local business processes; positioned under Fujitsu’s Uvance initiatives for the financial sector, the platform aims to support digital transformation and strengthen operational resilience for insurance companies

Banking

• In a recent webinar on the "Global Banks Outlook 2026", S&P Global Ratings stated that the Top 20 banking markets have stable trends (see chart above)
• Credit Saison Second Quarter Financial Results: Credit Saison's financial results for the first half of fiscal year 2025 (H1 FY25) present a dual narrative that is crucial for investors to understand; on one hand, the company's core domestic operations demonstrated remarkable strength, driving business profit well beyond internal targets; on the other hand, a series of special, non-recurring losses weighed on the bottom line, resulting in a slight year-on-year decline in net profit attributable to shareholders; this divergence underscores the resilience of the underlying business while highlighting the impact of discrete strategic decisions and market-specific challenges
• Raksul Group launches financial platform "Raksul Bank": Raksul Bank, a 100% subsidiary of Raksul, has officially launched its financial platform service for small and medium-sized enterprises through its partnership with GMO Aozora Net Bank; by utilizing BaaS (Banking as a Service), Raksul Bank provides a next-generation banking service that combines same-day account opening, industry-leading low transfer fees to other banks, point rewards, and secure security systems; Raksul Bank obtained a banking agency business license from the Kanto Local Finance Bureau on October 29, 2025, with GMO Aozora Net Bank as its affiliated bank; the banking services of "Raksul Bank" are provided by Raksul Bank as a banking agent commissioned by GMO Aozora Net Bank
• Money Forward functions to be integrated into SMBC Bank and Sumitomo Mitsui Card apps: Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Card and Money Forward Home have decided to integrate the asset management functions of the money visualization service "Money Forward ME" into the "Sumitomo Mitsui Banking Corporation App" provided by SMBC and the "Sumitomo Mitsui Card Vpass App" provided by Sumitomo Mitsui Card, starting in March 2026; the purpose is to further enhance customer experience by introducing the asset management functions, which are Money Forward ME's strengths, to customers of the "Sumitomo Mitsui Banking Corporation App" and "Sumitomo Mitsui Card Vpass App"

Payments

• During its investor briefing, Sony Financial Group disclosed that it aims for Sony Bank to become the first Japanese company to issue and distribute a dollar-denominated stablecoin in the United States under the U.S. Genius Act; for this effort, Sony Bank will partner with Bastion Platforms, which is also a portfolio company of the Sony Innovation Fund, while Sony Bank is also considering investing
• Wise becomes first money transfer operator to complete Zengin integration: Wise Payments Japan has completed its connection to the "Zengin System", a little over a year after being granted approval, becoming the first money transfer operator in Japan to do so, enabling nearly instantaneous processing of domestic yen-denominated transfers; the Zengin System is a system that processes domestic exchange transactions between financial institutions, such as bank transfers, online; previously, participation in the Zengin System was limited to banks and similar institutions, but in 2022, eligibility was expanded to include money transfer operators, with Wise becoming the first money transfer operator to connect; additionally, Wise's connection to the Zengin System is via a newly constructed API rather than the existing relay computer system; it becomes the first money transfer operator to directly conduct current account transactions with the Bank of Japan via API
• Shinoken Group and JAPAN POST BANK start tokenized deposits PoC: DeCurret DCP has signed a basic agreement for collaboration with Shinoken Group and JAPAN POST BANK for collaboration to utilize JAPAN POST BANK's tokenized deposits; this proof-of-concept (PoC) will verify the automation and efficiency of payments utilizing tokenized deposits, using the monthly rent payments in Shinoken Group's rental management as a use case; the parties aim to complete this by the end of December 2025; based on the results, they will proceed with preparations for full-scale implementation starting in 2026
• Suica & PASMO evolve - introducing teppay: East Japan Railway Company (JR East) and PASMO have announced a landmark initiative to unify Japan's leading transit wallets with "teppay" (テッペイ), a new integrated code payment service poised to resolve growing "cashless fatigue" among consumers; the service will be integrated directly within the existing Mobile Suica and Mobile PASMO applications, eliminating the need for users to download new software; the launch is scheduled to begin in Autumn 2026 for Mobile Suica users, with Mobile PASMO users gaining access in Spring 2027; this initiative represents a significant evolution of Japan's most familiar transit payment systems, transforming them into a comprehensive "life device" designed to simplify daily commerce for millions

Capital Markets

• Alpaca launches US stock execution service for SBI Securities: Alpaca, a global leader in brokerage infrastructure APIs providing access to options, stocks, ETFs, fixed income, and crypto, has launched US stock execution service for SBI Securities, Japan’s largest online brokerage firm, providing a broader offering for US stock execution and access in Japan; Alpaca currently powers hundreds of partners across 40 countries, collectively serving over 7 million brokerage accounts; the company holds broker-dealer licenses in the US, Japan, and other jurisdictions, and recently agreed to acquire WealthKernel, a UK- and EU-licensed FinTech firm, further expanding its global service capabilities

Digital Assets

• THXLAB and TOPPAN Digital provide dedicated Layer1 blockchain for AVATECT: THXLAB, which provides the Web3 as a Service (Web3aaS) platform "THXNET.", has built a dedicated Layer1 chain called "AVATECT Chain" using THXNET. as the foundational technology for implementing blockchain functionality in "AVATECT®," a digital identity management platform developed by TOPPAN Digital; it utilizes NFT, content protection technology, and provenance information (C2PA compliant) to guarantee the authenticity of digital content and avatars, realizing reliable asset distribution and management spanning the real world and digital space

The Last Word: A spendy stimulus could test the Bank of Japan

Over the last week, Allianz Research, in their "What to watch" from November 28, described the fiscal and monetary situation in Japan most succinctly, so we take the liberty of quoting them here. The full document has been shared on our LinkedIn feed.

"The FY2025 supplementary budget, for which the Cabinet finalized the funding plan today, amounts to JPY 21.3trn (3.3% of GDP), with a large rise in direct spending. This should worsen the fiscal deficit but will not prevent public debt-to-GDP from declining.

We revise on the upside our GDP growth forecasts to +1.4% in 2026 (+1pp) and +1% in 2027 (+0.2pp), less ambitious than the government, to account for uncertainties and potential tightening of financial conditions.

Headline inflation is likely tofall below the BoJ's 2% target by early 2026 but core inflation should remain high. As a result,we keep our outlook for the next BoJ hike in January, with the policy rate ending 2026 at 1.0% and 2027 at 1.5%.

We do not think the immediate market reaction was a "Truss moment", but rather a repricing of Japan's policy mix (fiscal expansion and monetary tightening). Of the 1.8%10-year JGB yield, 1.3% is now explained by the term premium, of which 0.7% is related to fiscal risks and 0.6% to inflation risks.

We see a risk that markets may start testing the BOJ's commitment to monetary tightening, potentially forcing more aggressive interventions such as FX operations (with a likely trigger near 165 USD/JPY), an aggressive hawkish shift or resuming bond purchases to cap yields.

Ultimately, the longstanding paradigm of the JPY as a low-yielding, stable funding currency is eroding and the role of the JGB market as a provider of global liquidity will diminish, leaving global financial markets more fragile."

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