Japan FinTech Observer #149

Welcome to the one hundred forty-ninth edition of the Japan FinTech Observer.

The one hundred-fiftieth edition will arrive in your inbox post the February 8 election.

If you are looking to meet in person this week, you will find us at the Japan Stablecoin Summit No. 2, the JBA Meetup 2026, and the Tokyo Asset Management Forum.

Here is what we are going to cover this week:

• Venture Capital & Private Markets: Sony Innovation Fund bets big on infrastructure as Talos secures $1.5 Billion valuation in Series B expansion; Startale Group secures 2 Billion Yen Series A investment from Sony Innovation Fund to accelerate vertical integration of Soneium blockchain ecosystem; enechain secures 5.05 Billion Yen in Series B extension as trading volume tops 3 Trillion Yen; SMBC’s U.S. venture arm expands portfolio with bet on BaaS provider Synctera; Paytner secures 2.7 Billion Yen in non-dilutive debt financing via Mizuho-arranged syndicated loan
• Banking: MUFG Bank deploys LayerX’s AI platform to streamline management of complex financial products; ITFOR accelerates receivables management via PAYSLE integration, digitizing convenience store payments to shorten collection cycles; Sumitomo Mitsui Financial Group's third quarter financial results
• Payments: Omise taps Visa’s token tech to combat fraud and boost approval rates for Thai merchants
• Capital Markets: Nomura's third quarter financial results
• Asset Management: Japan Post Bank consolidates asset management arms; Morningstar's analysis of the NISA market; SBI Global Asset Management third quarter financial results
• Digital Assets: Sumitomo targets stablecoins and trade finance with new blockchain infrastructure division; Laser Digital files for de novo bank in the US
• The Last Word: Startup Ecosystem Notes

Venture Capital & Private Markets

• Sony Innovation Fund bets big on infrastructure as Talos secures $1.5 Billion valuation in Series B expansion: Talos has successfully closed a $45 million extension to its Series B financing, bringing the total round to $150 million; the injection of capital propels the company’s valuation to approximately $1.5 billion, underscoring the market’s appetite for institutional-grade digital asset infrastructure; for the Sony Innovation Fund, joining this round alongside heavyweights like Robinhood Markets, IMC, and QCP is a strategic endorsement of the evolving financial stack; as the convergence of traditional finance and digital assets can be observed, Sony's investment thesis centers on backing the foundational technology that makes this transition seamless, secure, and scalable
• Startale Group secures 2 Billion Yen Series A investment from Sony Innovation Fund to accelerate vertical integration of Soneium blockchain ecosystem: Startale Group has announced the successful first close of its Series A funding round, securing approximately JPY 2bn in additional capital from the Sony Innovation Fund; this latest injection underscores a deepening strategic alliance between the web3 infrastructure firm and the Japanese conglomerate, aimed at establishing a robust global infrastructure where entertainment, intellectual property (IP), and artificial intelligence intersect; this Series A financing builds upon a foundational partnership established during Startale’s seed round in September 2023, which saw an initial ¥500 million investment from Sony; since then, the collaboration has expanded significantly, most notably through the formation of Sony Block Solutions Labs (SBSL), a joint venture developing "Soneium," an Ethereum Layer-2 blockchain
• enechain secures 5.05 Billion Yen in Series B extension as trading volume tops 3 Trillion Yen: enechain Corporation has successfully closed its Series B extension round, raising a total of ¥5.05 billion; the financing was structured through a combination of third-party private placement and additional long-term debt financing (including refinancing) from multiple major banks; Coreline Ventures returned as the lead investor for this round; the capital injection also saw support from major financial partners, including joint venture backing from MUFG Bank and Sumitomo Mitsui Banking Corporation (SMBC)
• SMBC’s U.S. venture arm expands portfolio with bet on BaaS provider Synctera: the SMBC Fin Atlas Beyond Fund, a U.S.-focused corporate venture vehicle operated by Sumitomo Mitsui Banking Corporation in partnership with Fin Capital, has executed its second portfolio investment, backing Banking-as-a-Service (BaaS) platform Synctera; the fund co-led the strategic financing round alongside the National Bank of Canada, signaling continued institutional appetite for infrastructure layers within the FinTech ecosystem
• Paytner secures 2.7 Billion Yen in non-dilutive debt financing via Mizuho-arranged syndicated loan: Paytner, a FinTech firm specializing in factoring services for freelancers, has closed a 2.7 billion yen syndicated loan agreement to fortify the company’s balance sheet without diluting equity, supporting its rapid transaction volume growth; the financing takes the form of a term loan involving a syndicate of major financial institutions; Mizuho Bank served as the arranger, with participation from the UPSIDER BLUE DREAM Growth Fund 2 (a limited liability investment partnership), Fukoku Mutual Life Insurance Company, The Shoko Chukin Bank, and The Yamanashi Chuo Bank

Not FinTech

• SMBC Edge deploys 3 Billion Yen into five startups in initial push to revitalize Japanese innovation: SMBC Edge, a strategic subsidiary of the Sumitomo Mitsui Banking Corporation (SMBC) Group, has executed approximately ¥3 billion in capital investments across five domestic startups; this marks the first major deployment of capital from the “SMBC Edge Fund I, L.P.,” which was established in October 2025 to accelerate the creation of new industries in Japan
• Zettabyte secures Headline Asia backing to target Japan’s booming AI infrastructure market: AI computing firm Zettabyte has secured a strategic investment from venture capital firm Headline Asia to fund its expansion into the burgeoning Japanese AI infrastructure market; the undisclosed capital injection will be used to scale zWARE™, Zettabyte’s proprietary GPU infrastructure software, and advance "TITAN," the company’s dedicated AI data center expansion initiative in Japan; the move capitalizes on a critical new build cycle in Japan's tech sector, which is currently grappling with high enterprise demand for AI compute power and significant constraints on the local power grid

New Funds

• Japan’s ANRI targets 30 Billion Yen for sixth seed fund and unveils balance-sheet pre-seed initiative: ANRI, a Tokyo-based independent venture capital firm, has established "ANRI Fund No. 6," an investment vehicle with a targeted final corpus of 30 billion yen; the firm also disclosed the launch of the "ANRI Pre-Seed Program," a strategic initiative funded directly from the firm’s balance sheet designed to support founders facing high levels of uncertainty; building on the momentum of its predecessor, Fund No. 6 aims to be one of Japan’s largest seed-stage funds; the vehicle will maintain the firm's broad investment mandate, deploying capital across sectors ranging from consumer internet services to life sciences and deep tech

Banking

• Japanese megabanks could increase their net interest margins over the next two years, diverging from a trend across Asia-Pacific, as the nation's central bank is expected to further raise interest rates, according to S&P Global; all four Japan-based lenders among the 25 largest banks by assets in the region are projected to post gains in net interest margin (NIM) in calendar years 2026 and 2027, according to Visible Alpha estimates
• MUFG Bank deploys LayerX’s AI platform to streamline management of complex financial products: Mitsubishi UFJ Bank (MUFG Bank) has adopted LayerX's "Ai Workforce" platform to overhaul operations within its Solution Products Division (SPD); the implementation marks a significant shift toward digitizing the lifecycle of highly specialized financial instruments, from initial proposals through to mid-term management
• Japan's MUFG has seen a surge in interest from Japanese automakers hoping to tap its 20% stake in Indian non-bank lender Shriram Finance Limited to boost sales in the fast-growing Indian market, an MUFG executive said; India has become a major investment focus for MUFG - Japan's largest banking group - and for clients such as Toyota Motor Corporation, with business generated through the Shriram investment potentially lifting profitability across the group, Yasushi Itagaki, head of MUFG's global operations, told Reuters in an interview
• ITFOR accelerates receivables management via PAYSLE integration, digitizing convenience store payments to shorten collection cycles: ITFOR (TSE Prime: 4743), a leading provider of financial IT solutions, has integrated DSK Payment’s electronic barcode solution "PAYSLE" into its automated payment guidance service, "Pay Collect"; companies can now send electronic barcodes directly to a debtor's smartphone via SMS or email; this eliminates the need for physical payment slips, allowing end-users to settle payments immediately at convenience stores
• Sumitomo Mitsui Financial Group's third quarter financial results: Sumitomo Mitsui Financial Group (SMBC Group) continues to demonstrate exceptional momentum as of the third quarter of FY3/2026, benefiting significantly from the normalization of the Japanese macro-financial landscape; the results through December 31, 2025, indicate a robust transition into a higher-interest-rate environment, with top-line growth fueled by domestic margin expansion and disciplined corporate lending; while the headline figures suggest record-breaking pace, a deeper analysis reveals a divergence between core operating performance and bottom-line results propped up by strategic asset divestments

Payments

• Omise taps Visa’s token tech to combat fraud and boost approval rates for Thai merchants: global payments giant Visa and Southeast Asian payment gateway Omise have announced a strategic partnership to fortify Thailand’s digital commerce infrastructure; the collaboration introduces Visa’s Network Token solution to the Thai market, a technological shift aimed at mitigating online fraud while simultaneously increasing transaction approval rates for local merchants; for Omise, Japanese-founded in 2013 and now a dominant player in the APAC region, the integration represents a continued push to provide enterprise-grade infrastructure to merchants in Thailand, Singapore, Malaysia, and Japan

Note

• Having had the opportunity to celebrate Alpaca's unicorn status at the Tokyo FinTech Meetup last week, we highlight Omise as another Japanese-founded, but headquartered outside of Japan unicorn - its latest funding round in 2022, a $120 million Series C+, was executed at a unicorn valuation; the third player in this club is Gojo & Company, which is actually headquartered in Japan, but conducts its social lending business primarily in developing markets (last funding round a Series F in October 2024, valuing the firm at $880 million); according to the NEXT Unicorn Ranking, there is not another domestic FinTech company that comes anywhere near the unicorn level

Capital Markets

• Nomura's third quarter financial results: Nomura Holdings’ third-quarter results for the fiscal year ending March 31, 2026, provide a clear validation of the firm’s "2030 Management Vision"; achieving a Return on Equity (ROE) of 10.3%, the group has now successfully met its 8%–10% target range for the seventh consecutive quarter; the defining metric of this period is the record-breaking pretax income from the four core business segments, which reached Y142.9 billion—the highest level in eighteen and a half years; this performance signals a decisive pivot away from historical reliance on volatile market swings toward a diversified, resilient earnings model
• The Ministry of Finance - Japan has published its "JGB Newsletter January 2026"
• Eastspring sees "Value in Japan amid yen strength and higher yields"
• UBS provides "JPY and JGBs: Facts versus fears"

Asset Management

• Japan Post Bank consolidates asset management arms: Japan Post Bank announced a strategic reorganization of its asset management subsidiaries, resolving to merge JP Asset Management and Japan Post Investment to form a unified entity aimed at bolstering the group’s investment capabilities; the new entity, to be named Japan Post Bank Asset Management, will launch on April 1, 2026, following an absorption-type merger in which JP Asset Management will survive and Japan Post Investment will be dissolved
• Morningstar's analysis of the NISA market: the year 2025, the second following Japan's landmark NISA reforms, saw a massive and steady flow of capital into the market, with total net inflows reaching approximately ¥14.2 trillion; however, this headline figure masks the year's defining characteristic: a profound qualitative shift in how that capital is being allocated. 2025 was the year the Japanese retail investor's behavioral maturity began to catch up with the NISA system's ambitious structural evolution; the two pivotal trends were the strategic expansion of the NISA framework to encompass all generations and a tangible shift in investor behavior towards diversification and long-term discipline; Morningstar's report analyzes these developments by dissecting NISA system amendments and examining detailed 2025 fund flow data to provide a comprehensive outlook for financial professionals
• SBI Global Asset Management third quarter financial results: SBI Global Asset Management (SBIGAM) has delivered a historic quarter, achieving record-breaking financial results and successfully executing key strategic initiatives; these outstanding achievements are the culmination of a consistent, long-term strategy focused on delivering superior value through innovation, scale, and customer trust; the results from this quarter unequivocally validate SBIGAM's strategic direction and operational excellence

Digital Assets

• Sumitomo targets stablecoins and trade finance with new blockchain infrastructure division: Sumitomo Corporation, one of Japan’s leading general trading houses, is deepening its footprint in the digital asset infrastructure space; the conglomerate announced the launch of its Blockchain Node Operation Initiative, a move designed to integrate decentralized technology into its core business lines, ranging from trade finance to energy; in collaboration with its IT subsidiary SCSK, Sumitomo has commenced node operations on major public and enterprise ledgers, including Ethereum, Avalanche, and the Canton Network; by running nodes—the critical infrastructure responsible for validating transactions and maintaining network consensus—Sumitomo is effectively positioning itself as a stakeholder in the governance and security of these ecosystems
• Laser Digital Americas Group Holdings has filed a de novo application to the Office of the Comptroller of the Currency (OCC) to form Laser Digital National Trust Bank (LDNTB), a proposed National Trust Bank focused on digital assets, offering custody and spot trading services; if approved, the charter will position LDNTB to serve institutional customers across the U.S., offering custody of digital assets, integrated with spot trading of crypto and fiat currencies, as well as staking of eligible custodied digital assets; LDNTB will also offer custody of U.S. government securities
• Mori Hamada & Matsumoto's latest Financial Regulation Newsletter covers the "Publication of the Working Group Report on the Crypto-Asset Regulatory Framework" in great detail

The Last Word: Startup Ecosystem Notes

This week, we highlight three startup ecosystem report, of which the StartupBlink "Innovators Business Environment Index" provides a global ranking, Speeda takes a look at the domestic startup funding landscape in 2025, and Yoii projects out into 2026 through a survey of venture capitalists and startup founders.

According to StartupBlink's "Innovators Business Environment Index (IBEI) 2026", Japan has secured a formidable position on the world stage, ranking 8th globally and 2nd in the Asia-Pacific region. This top-tier standing places Japan among the world's most attractive destinations for innovative enterprises. Japan's top-10 position warrants a closer look at the specific factors driving its success and how it navigates the competitive landscape of one of the world's most dynamic economic regions.

According to Speeda's "Japan Startup Finance 2025" report, the Japanese startup ecosystem entered 2025 in a phase of consolidation and strategic re-evaluation. Top-level funding metrics serve as a critical barometer for the health of this ecosystem, reflecting aggregate investor confidence and the overall capacity for innovation. Understanding these macro trends is the first step in identifying the underlying currents shaping capital allocation, from early-stage ventures to mature, scale-up enterprises. The data from 2025 reveals a market characterized by stability at the surface, but with significant shifts occurring in how capital is being deployed.

Yoii has analyzed the 2026 funding landscape for Japanese startups based on a survey of 100 companies and venture capitalists. While both groups agree that 2025 was a difficult year, venture capitalists maintain a more optimistic outlook for the future than entrepreneurs. A significant perception gap exists regarding priorities: startups focus on product development, whereas investors prioritize the competence of the management team. The data suggests an increasing market polarization, where capital is concentrated in high-potential sectors like AI and deep tech. To succeed, startups are encouraged to improve capital efficiency and explore diverse financing methods beyond traditional equity. These insights serve as a strategic guide for navigating a climate of stricter investor selectivity and evolving exit expectations.

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