#Japan #Tokyo #financial platform #Mizuho Bank #UPSIDER Holdings

Mizuho Bank Acquires Stake in UPSIDER Holdings: Strategic Collaboration to Support SMEs

In a significant development in the Japanese financial landscape, Mizuho Bank, a subsidiary of Mizuho Financial Group (Mizuho FG), has signed a stock transfer agreement to acquire a portion of shares from UPSIDER Holdings. This acquisition is anticipated to make UPSIDER a consolidated subsidiary of Mizuho Bank, setting the stage for enhanced collaboration and new opportunities in the financial sector for small and medium-sized enterprises (SMEs).

Context of the Deal

Japan's economy is transitioning from a deflationary environment, showing signs of growth propelled by rising investments in digital transformation (DX) and active wage increases. Nonetheless, challenges remain, particularly in addressing price increases and labor shortages, especially among mid-sized and small businesses. Mizuho FG emphasizes the urgency of empowering Japanese enterprises to bolster competitiveness and responsiveness to these evolving economic conditions.

Mizuho FG’s purpose, stated as "Challenging Together, Growing Together," aligns with their focus on enhancing the competitive edge of Japanese businesses through thorough support in business growth and corporate value enhancement. In parallel, UPSIDER is dedicated to building a global financial platform to support challengers. Their unique AI credit model offers innovative solutions to the hurdles faced by startups and SMEs in Japan, demonstrating significant traction with over 80,000 companies using their primary services, including the corporate card "UPSIDER" and the invoice payment service "Shiharai.com."

From November 2023, Mizuho FG and UPSIDER have also initiated a joint venture aimed at supporting growth-stage startups with the "UPSIDER BLUE DREAM Fund," which has already facilitated over 13 billion yen in loans. The platform has evolved into an open ecosystem, incorporating participation from seven domestic financial institutions.

The synergy between Mizuho FG and UPSIDER — combining their technological prowess, expertise, customer bases, and networks — is anticipated to accelerate solutions for Japanese businesses, forming a robust rationale for this strategic partnership.

Future Initiatives

Following the transaction, Mizuho FG and UPSIDER plan to intensify their efforts in several key areas:

1. Integrated Service Solutions: The collaboration will enhance UPSIDER’s offerings such as "UPSIDER," "Shiharai.com," and "UPSIDER AI Accounting" by melding them with Mizuho Bank’s financial solutions. The focus will be on providing seamless services that contribute to the growth and productivity of clients.

2. Innovating New Credit Models: By merging UPSIDER's AI technology and credit expertise with Mizuho Bank’s extensive experience and information, a new model of credit service is projected. The aim is to elevate Mizuho Bank's operations while establishing a sustainable service provision framework.

3. Creating an Open Ecosystem: The initiative will foster collaboration with diverse partner companies, aiming to develop high-value services that surpass the traditional boundaries of finance.

Management Post-Acquisition

Mizuho Bank has acquired about 70% of UPSIDER's shares from various venture capitalists for approximately 46 billion yen, effectively making UPSIDER a subsidiary. This strategic move is designed to maximize mutual resources, thereby enhancing the value offered to clients.

Despite the acquisition, UPSIDER’s founding shareholders will retain their stock holdings, maintaining their agility as a startup while leveraging Mizuho FG’s resources to accelerate new value creation. The completion of this transaction is projected for September 2025, contingent upon regulatory approvals.

Statements from Leadership

Mizuho FG's CEO, Masahiro Kihara, emphasized the necessity of strengthening the competitiveness of Japanese firms for the country to regain its global presence. He noted that this initiative reflects the shared missions of both organizations, aimed at supporting the challenges faced by SMEs and startups in Japan.

Meanwhile, Tohru Miyagi, CEO of UPSIDER, expressed confidence that the collaboration would significantly accelerate their mutual vision, reinforcing UPSIDER's mission of supporting challengers and redefining finance in Japan.

This collaborative effort represents a powerful alignment of purpose and resources, poised to influence the ecosystem of Japanese financial services positively.