#Japan #Tokyo #Haircare #IROP #YHAW

YHAW's Investment in Irop: A New Era in Hair Color Care

In a significant move, YHAW has announced its decision to invest in Irop, a company known for its innovative hair color diagnostic and personalized color care services. This decision was made during YHAW's board meeting held today, marking the beginning of a capital and business partnership with Irop.

Background and Objectives of the Investment

YHAW is set to undergo a new management system by July 2025 with a focus on "hands-on field-based strategies" and practical management consulting. The company aims to expand through mergers and acquisitions, targeting an EBITDA of 1 billion yen. By transcending traditional business boundaries and promoting collaboration across industries, YHAW aims to tackle societal challenges while enhancing corporate value. Recently, YHAW has strengthened its collaborations, notably establishing a partnership with Rakuten Mobile in the telecommunications sector.

In line with its strategic vision, YHAW and Irop have agreed to a business partnership contract, which includes future capital collaborations announced on July 9, 2025. Irop has revolutionized the hair care industry, providing personalized color care services based on individual hair color diagnostics. The company has seen rapid growth, surpassing 10,000 members and achieving a customer satisfaction rate of 93%. This alignment with YHAW’s principle of value creation from a practical field perspective is commendable.

However, Irop, being a startup, faces challenges with fundraising and management. To strengthen its position, the company welcomed 4M, a firm specializing in business investment and management consulting, as its largest stakeholder this August. With 4M's extensive experience in business investment and FAS support, coupled with YHAW’s hands-on and pragmatic approach to management, a significant synergy is expected from this collaboration, leading to this investment.

Future Developments

Through this partnership, YHAW will collaborate with Irop and 4M to co-create growth strategies for the after-salon care market. The first step will involve utilizing YHAW's strengths in consumer insight analysis and marketing initiatives to deepen the understanding of Irop’s hair color data and customer behavior, thereby accelerating product development cycles and improving services. Together with 4M, YHAW aims to explore domestic and international M&A opportunities and business succession cases to diversify Irop's service offerings and expand its market reach. In doing so, YHAW intends to actively encourage open innovation across industries, enhancing the overall competitiveness of the beauty industry.

Furthermore, YHAW is committed to maintaining a hands-off approach to the management of Irop, respecting its on-the-ground insights and agile development processes. To ensure that the introduction of external capital does not hinder creativity and responsiveness, YHAW plans to regularly hold informal discussion sessions, fostering an environment where both parties can share challenges and ideas freely. Through these dialogues, YHAW seeks to establish a partnership that transcends the conventional investment-client relationship, creating new value in the after-salon care market. Additionally, as part of this initiative, Irop plans to conduct a pilot project for its unique community-driven beauty marketing strategy, known as “tribe marketing.”

Comments from Executives

Shingo Kameda, President and CEO of YHAW, stated, "YHAW has consistently tackled various corporate challenges through co-creation with diverse industries and a hands-on approach. Irop is pioneering a new market with its unique service that diagnoses individual users’ hair colors and provides tailored care products. This investment and capital partnership will introduce practical strategies into the beauty field while being a crucial step in our M&A strategy. We will fully support the growth of our investment, ensuring that we maintain the agility and freedom characteristic of startups while striving for benefits for all stakeholders."

Masami Hamasaki, Director of Brand Co-Creation, commented, "This collaboration with Irop will significantly enhance the marketing solutions developed by YHAW’s brand co-creation department. We will work diligently to strengthen our structure, ensuring a reliable experience for all current and future partners. Simultaneously, we aim to deepen our collaborations with existing partners while optimizing business support for customer acquisition and branding."

Overview of Investment Details

YHAW's investment will involve the underwriting of common stocks newly issued by Irop, with an investment amounting to approximately 15 million yen. While the percentage of stake acquired will not be disclosed, it will be below the threshold requiring the application of the equity method.

Timeline

• - Investment Resolution Date: September 8, 2025
• - Contract Signing Date: September 8, 2025 (Scheduled)
• - Payment Completion Date: September 8, 2025 (Scheduled)

Outlook

Currently, the anticipated impact of this investment on YHAW’s group performance is considered minor due to the stake being below the threshold for applying the equity method. However, if any issues arise that should be disclosed, YHAW will promptly inform relevant parties.