While Mercari has gained traction in Japan and Britain, in the U.S. although it does not any direct competitor, it is to be seen how it will mitigate challenges from tech giants, including eBay Inc and Amazon.com who dominate the e-commerce market.
Riding on the success of a recent funding round which boosted its market capitalization beyond the threshold of $2 billion, Japanese flea market app operator Mercari Inc plans to expand rapidly in the United States, said Shintaro Yamada, Mercari’s founder and chief executive in a statement.
Mercari offers an online marketplace for individuals to trade used items primarily through a smartphone app; it has gained traction in Britain, Japan and in the U.S. where its business is led by former Facebook Inc executive – John Lagerling.
Founded in 2013, Mercari is a Japanese unicorn: a startup whose valuation is more than $1 billion.
“We can’t be successful globally without success in the U.S.,” said Shintaro Yamada. “If a service is accepted in the U.S., it tends to become universal.”
In a funding round, last month, Mercari raised $47 million (5 billion yen) which gave it a valuation of 252 billion yen, a 100% jump in its valuation from two years ago when its backers included Mitsui & Co Ltd, a Japanese trading house, and Development Bank of Japan.
Mercari has not disclosed backers of its latest funding round.
Mercari has applied to be listed on the Tokyo Stock Exchange in July 2017 it is widely expected to conduct an initial public offering in 2018, whose timing Yamada declined to comment on.
In the U.S., Yamada says Mercari “has no direct competitor” and focuses exclusively on peer-to-peer resales of everyday goods; dominated by tech giants, including eBay Inc and Amazon.com Inc, the U.S. has since long been a challenge for Japanese internet firms.
Line Corp, Japan’s biggest messaging app operator by active users, narrowed its focus to Asia after being overshadowed by Facebook’s WhatsApp and Messenger app.
“I know it won’t be easy,” said Yamada. “But perhaps others have not tried enough times.”
The Mercari app has been downloaded over 30 million times in the United States, versus 60 million in Japan.