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Mercari’s IPO, and Mercari’s Mafia

Today is the day! Congrats to Shintaro Yamada and the Mercari team on their IPO. Scaling to a multibillion dollar IPO in 5 years is more than a lot of Silicon Valley legends can boast. As not only an investor but also a cheerleader for Japan’s startups, I’m proud to see another “unicorn” exit on the scoreboard.

In a way, this IPO is bittersweet. What was widely regarded as Japan’s “only unicorn” has now exited, and it appears that we are back to zero unicorns. Although insiders know that they are not the only unicorn here, Mercari led with that narrative and are a symbol of startup success in Japan.

And now that they have graduated from the startup world, a lot of people have asked me, what now? I don’t know, but my hunch is that their IPO will have a ripple effect in the local startup ecosystem.

Mercari is not only a symbol of success, but also a symbol of hope. They’ve shown potential entrepreneurs that scaling to over a billion dollars isn’t just something that happens in Silicon Valley – it can also happen right here in Tokyo. And Yamada-san’s audacity to expand beyond Japan early sets a great example for others to aim higher. Whether Mercari succeeds on that front or not doesn’t change the inspiration that Yamada-san has instilled on fellow founders.

And the Mercari employees that witnessed this from the inside had front row seats. They not only saw that a company can scale at that speed, but they also learned what it takes to make it happen. This will give them the hunger to relive that, and the knowhow to do it again. What makes Silicon Valley the Mecca of startups is not just the combination of money, talent, and guts. Of course, all of those things matter. But it is also the knowledge that has been accumulated over the years. The knowhow to build companies of massive scale quickly has been passed down from generation to generation. So when they find something magical, they know how to capture it and scale it to its full potential. My hope is that they will harness this advantage and go on to build impactful companies of their own.

These folks were also fortunate to have a leadership team who believed in sharing equity incentives and was generous with their stock options. Most startup exits in Japan make the founders and investors rich, but not the employees. Mercari’s IPO will not only birth new angel investors, but also give these people a cushion to go out and take on new challenges.

Of course, the best example of this is in Silicon Valley is PayPal. Former PayPal members went on to build LinkedIn, YouTube, Yelp, Tesla, SpaceX, Yammer, and Palantir. Eventually, they were coined the “PayPal Mafia.” Now that Mercari has gone public, perhaps there will be a “Mercari Yakuza” here in Japan. I think I like the alliteration of “Mercari Mafia” better.

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Founding Partner & CEO @ Coral Capital

James Riney

Founding Partner & CEO @ Coral Capital

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