SmartBank raises JPY 4.08bn in first close of Series B

SmartBank, provider of the prepaid card household budget app “B/43,” has completed its Series B round first close, raising 2.93 billion yen through a third-party allocation of shares. The round was led by SMBC-GB Growth, with participation from existing shareholders and new investors including Seven Bank and Japan Post Spiral Regional Innovation. Combined with 1.15 billion yen in debt financing from multiple financial institutions in April 2024, this completes the Series B round first close.

This brings the company’s total funding since inception to 7.08 billion yen.

Equity investors

• SMBC-GB Growth №1 Investment Limited Partnership
• Tokoku-GB Investment Limited Partnership
• Meiji Yasuda Future Co-creation Investment Limited Partnership
• MSIVC2023V Investment Limited Partnership
• Japan Post Spiral Regional Innovation №1 Investment Limited Partnership
• DBJ Capital Investment Limited Partnership
• Seven Bank, Ltd.
• ALL STAR SAAS FUND Pte. Ltd.
• GMO GFF Investment Limited Partnership
• Mizuho Growth Support №5 Investment Limited Partnership

Debt financing

• Shoko Chukin Bank
• MUFG Bank
• JA Mitsui Leasing
• Kiyo Bank
• Hokkoku Bank

Background of Funding

SmartBank has developed and provides “B/43,” a new expense management service that combines a prepaid card with a household budget app, enabling automatic bookkeeping through cashless payments. Recently, they have expanded functionality to include credit card and bank account integration features and AI receipt reading capabilities, allowing users to manage all expenses through a single B/43 app, supporting household budget visualization and optimization.

With rising price consciousness due to inflation, increasing dual-income households with limited time for budget management, and the spread of cashless payments, the market has responded positively to the ability to easily visualize household finances. B/43 has surpassed 1 million downloads within 3 years of service launch.

Moving forward, the company aims to go beyond just streamlining household budget management to develop and provide services committed to generating surplus funds. Specifically, from next spring, they plan to launch an AI assistant service that uses generative AI to guide users in improving their household finances based on their goals and daily spending patterns.

The newly raised funds will be used for talent acquisition to strengthen the organization and marketing activities to acquire users, with a focus on developing AI-powered household budget improvement services.

“Creating a World Without Money Worries” — Challenges of Budget Management Apps and Future Business Strategy

Under the supervision of the NLI Research Institute, SmartBank conducted a survey on household “wasteful spending.” The results showed that the average annual “wasteful spending” per household is approximately 104,292 yen, with an estimated total of 5.7927 trillion yen across Japan. While there are variations due to income differences, this suggests that many people have the potential to generate surplus funds by reducing “wasteful spending.”

To reduce “wasteful spending” that strains household budgets, budget visualization and improvement actions through household bookkeeping are necessary. However, when asked why people can’t visualize their finances, responses included not only “it’s troublesome” but also “even if I understand my financial state, I don’t know how to improve it.”

These results show that budget management alone doesn’t contribute to the ultimate goal of financial improvement, yet many existing budget management apps have only focused on reducing the burden of budget management.

In light of this, SmartBank has formulated a new business strategy centered on “generative AI” and “budget improvement.” Going forward, they aim to evolve from a service that merely provides budget management to one where generative AI acts as a personal advisor, committed to household budget improvement and automation.

Through this, they aim to contribute to reducing Japan’s estimated 5.7927 trillion yen in “wasteful spending” and help create surplus funds for “investment,” “travel,” and “self-investment,” working toward their goal of “creating a world without money worries.”

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