Lancers could have IPO’d but it raised $8.5M instead. COO Adachi explains why

Tech in Asia learned today that freelance platform service Lancers secured US$8.5 million in funding from telco KDDI, human resource firm Intelligence, gaming company Colopl, and venture capital firms Gree Ventures, Globis Capital, and GMO Venture Partners.

The funding is a long-awaited counterpoint to the regular stream of positive PR coming from rival Crowdworks. Crowdworks is a more visible company in Tokyo’s startup community and is not shy about promoting itself. Since June, Crowdworks has sent out 26 press releases to Lancer’s 18.

The biggest news was of course the Crowdworks IPO. The company can expect to raise US$10 million with a market cap of about US$100 million. To go from zero to US$100 million in a scant three years is an impressive feat, but Lancers (which was founded back in 2008) is not worried.

COO Kazuhisa Adachi spoke with Tech in Asia today about the funding and the future of the company.

“More than trying to raise funds, we wanted to strengthen our business relationships so we proceeded with that goal in mind,” Adachi says. The funding deal comes packaged with business partnerships with KDDI, Intelligence, and Gree. “Particularly with KDDI and Intelligence, we can popularize crowdsourcing in the countryside and improve our service for non-internet companies,” he notes.

The strategy was born out of one key statistic: 55 percent of all work requests come from Tokyo, but 75 percent of that work is completed by freelancers outside of the city. The slipping economic power of Japan’s countryside is an open secret and makes the region a perfect target for Lancers.

The money itself will be disbursed for hiring, development, and freelancer support. A Rakuten veteran, Adachi sees the support system working similarly to the online shopping giant’s ecommerce consultant program. Consultants are assigned different shops in the marketplace and work with the owners to increase revenue.

For now, Lancers is not eyeing an IPO. The three-year head start it has on Crowdworks has kept it the market leader but its rival is not backing down. Aside from the IPO, always a cause for celebration in Japan, Crowdworks has some nifty friends as well. Its relationships include Softbank, MIT, Credit Saison, and noted insurance firm Lifenet.

That’s an impressive list but KDDI, Intelligence, and Gree will help keep Lancers in the driver’s seat a little while longer.

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