Mercari, a Japan-based online marketplace operator backed by corporates GMO, Itochu, Mitsui and United, has received approval for a $1.1bn initial public offering on the Tokyo Stock Exchange, Reuters reported today.
The company will price its shares at ¥2,200 to ¥2,700 ($20 to $24.60) to achieve a market value of $3.3bn when it lists on June 19. News of the flotation emerged in January 2018, when Mercari was said to be targeting a valuation of more than $1.8bn.
Founded in 2013, Mercari runs a marketplace app through which users can buy and sell second-hand items in dozens of categories, ranging from clothes and antiques to electronics and musical instruments.
Sellers are emailed a printable shipping label once an item is sold. Items can be listed for free, with Mercari charging the seller a flat 10% fee upon sale.
The app has been downloaded more than 100 million times according to the company, and is available in Japan, the UK and the US. Proceeds are expected to enable Mercari to expand further internationally and gain traction in the US.
Approval for an initial public offering followed an initial plan by Mercari to go public by the end of 2017, only for the company attract the attention of Japan’s Financial Services Agency when it filed last summer.
The agency took the view that Mercari needed to register in a category with strict regulation, due to a feature that lets users use money from a sale to purchase other goods. Mercari was eventually allowed to register in a less stringent category.
An additional delay was due to Mercari implementing a range of additional anti-fraud measures following a request from Japanese law enforcement.
Tokyo Stock Exchange’s self-regulatory arm, Japan Exchange Group, decided to track the company’s revenues for three months to identify how those security measures might impact transactions before granting it permission for an IPO.
Mercari has raised nearly $115m in funding to date. It closed a $75m series D round in 2016 featuring conglomerate Mitsui, financial services firm Sumitomo Mitsui Trust Bank’s Japan Co-Invest unit and public financial institution Development Bank of Japan.
The series D round, which valued Mercari at more than $1bn, also included Globis Capital Partners, World Innovation Lab and Global Brain.
Internet group United made a $3m investment in Mercari in 2013 that was followed by Global Brain and Globis joining Itochu Technology Ventures and GMO Venture Partners, respective investment units of conglomerate Itochu and internet company GMO, to add $14m in March 2014.
GMO Venture Partners, Global Brain, Globis, East Ventures and World Innovation Lab then provided another $22m for Mercari seven months later.