Forest Inc. Raises 6 Billion Yen in Series B Funding Round to Propel Growth

Forest Inc. Raises 6 Billion Yen in Series B Funding Round

In an ambitious move to enhance its operations and growth trajectory, Forest Inc. has successfully completed a Series B funding round totaling 6 billion yen. This vital financing comes from numerous entities, including the University of Tokyo Edge Capital Partners (UTEC). The funds will aid Forest Inc. in its mission to cultivate Japanese manufacturing brands through mergers and acquisitions (M&A) while expanding globally.

Founded in 2021, Forest Inc. operates under the mission statement “Nurturing Japanese goods and coloring the world.” They have already executed 21 M&A transactions within the e-commerce sector, which include the succession of local companies, the acquisition of business ventures from U.S. counterparts, and the procurement of shares in startups.

The company has significantly strengthened its capabilities as a fabless SPA (Specialty Store Retailer of Private Label Apparel), covering a broad spectrum that includes product planning, logistics, design, marketing, and customer support. Additionally, they have progressed in building robust data infrastructure and establishing logistics and development bases in Hangzhou, China, alongside acquiring Tsuzucle Inc. to enhance their digital marketing strategies.

This Series B funding aims to underline Forest’s commitment to accelerating growth in its next developmental phase. Existing investors from prior seed and Series A rounds have participated in this follow-on investment, while significant new players such as Japan Post Capital and Dentsu Ventures have joined as part of an effort to strengthen business cooperation. Wealth Asset and Globe Advisors LLC, with their extensive market insights through public equity investments, are also coming aboard.

The company plans to further fast-track its M&A strategy focused on business succession, enhance its data infrastructure, and propel international e-commerce initiatives. A key area of focus will be the comprehensive rollout of its retail technology venture.

Comprehensive Rollout of Retail Technology Business

Anticipating collaboration with Tsuzucle, which joined the group through M&A in July 2024, Forest Inc. aims to support the growth of retail businesses by combining their M&A expertise and e-commerce knowledge with Tsuzucle’s strengths in digital marketing and e-commerce development. The synergy between the two companies is expected to fuse e-commerce with technology, significantly enhancing the overall value in the retail industry.

Forest Inc. will provide targeted consulting services in retail business management, marketing strategies, and digital marketing operations. Support for constructing e-commerce platforms, AI implementation, and cross-border e-commerce expansion are among the key initiatives.

Investor Insights

The confidence in Forest’s potential is echoed by several investors.

UTEC's COO and Managing Partner, Nobuaki Sakamoto, remarked that based on research from McKinsey, the e-commerce sector is projected to be the most promising market over the next 15 years, surpassing other tech areas such as SaaS or AI. He highlighted the crucial challenge posed by the lack of successors in SMEs and emphasized Forest’s strategy as not just rational but fueled by a deep passion for showcasing Japanese values worldwide.

Takuhisa Shimoda, President of Wealth Asset, stated, “Since our initial investment in Forest in 2023, we have witnessed their efficient e-commerce roll-up efforts. I am confident about Forest's unique position and growth potential in merging brand succession with global expansion.”

Akihiko Okamoto from Headline Asia Partner added, “We are impressed by the Forest team’s expertise and sincere dedication to nurturing excellent Japanese brands through succession and growth.”

Forest’s endeavor resonates with investors as their practices contribute not only to business growth but also address significant societal challenges, like alleviating the shortage of successors among SMEs while delivering quality Japanese products to consumers worldwide.

Conclusion

As Forest Inc. prepares to accelerate its journey supported by this significant influx of capital, the company remains committed to its mission: enriching people’s lives with sustainable Japanese products through e-commerce and retail technologies, thereby contributing to a more vibrant society.