Letter
Stakeholder Update
2022-6-30
Over the past few years, the keyword "digital transformation" has rapidly increased in prominence in both media coverage and documentation. As all companies, regardless of industry size, promote a variety of DX initiatives, the discussion is increasingly focusing on the use of digital technology not only to improve operational efficiency but also to create new business models and revenue streams. Opportunities are expanding significantly for vendors of digital solutions and software services, prompting companies from startups to major corporations to accelerate investments in scaling their workforce.
DDespite the volatility in emerging stock markets, particularly within the Internet and technology sectors, companies are still in the midst of their digital transformation journey, with the full impact of system implementations yet to be realized. In this context, we are actively implementing full-scale systems and are starting to see the initial results. Since our founding in 2020, we have been supporting the creation of digital businesses as a DX partner for our clients, and we are experiencing these changes on the frontlines every day.
Background of the series A round
In this business environment, ROUTE06 today announces that it has raised approximately 1.5 billion yen in a third-party allotment of new shares (private placement) with ALL STAR SAAS FUND as the lead investor and Jafco Group, Delight Ventures, Genesia Ventures, Mizuho Capital, SMBC Venture Capital, and Mitsubishi UFJ Capital as the underwriters. The Company issued new shares in a third-party allotment (Series A round) of approximately 1.5 billion yen. To offer more convenient services to our clients, we plan to make significant investments in the development of 'Plain,' our enterprise business API platform, and in strengthening our internal organizational structure.
We also believe that one of the values we can provide to our stakeholders is to create opportunities, including business creation, through collaboration not only with specific corporate groups but also with a variety of partners by building a network with a wider range of companies, from major corporations to start-ups, by strengthening cooperation with each of our shareholders. We believe that this is one of the values we can provide to our stakeholders. At the time of our initial seed round, when we raised funds from Delight Ventures and Genesia Ventures, the "2025 cliff" issue of aging mission-critical systems was one of the key issues in the enterprise systems area, and we will continue to work with vendors to solve such issues. While vendors continue to focus on solutions to these issues, there is also a growing focus on more concrete discussions of how to promote partnerships between user companies and vendors.
The latest "DX Report 2" (a report by the Study Group for the Creation of Digital Industries) published by the Ministry of Economy, Trade and Industry (METI) emphasizes the need to "promote co-creation between user companies and vendor companies. The report also proposes a future industry in which the barriers between user companies and vendor companies will disappear as vendor companies shift from a run-the-business (maintenance and operation) focus to a value-added focus and pursue agile development and other means to respond quickly to changes in the business environment. Such a situation is the world we are aiming for, and we will do our best to accelerate this trend with the cooperation of our new shareholders.
Future of ROUTE06
About the product
Plain" is a back-end system that contributes to the vertical launch and continuous service improvement of online marketplaces and other digital businesses, whether B2C or B2B. It can be implemented at a lower cost and in a shorter period of time than full-scratch system development, and it allows more flexible UX and business design than no-code/low-code software services, and has a set of functions and infrastructure based on agile development. In recent years, UX has become a higher priority in the enterprise software domain, requiring flexible workflows and systems to deliver superior customer service.
Headless architecture*
The headless architecture* allows for the design of user experiences and workflows freely according to business applications and customer values, as well as the implementation of well-designed user interfaces.
Orchestration*
One-stop shop for the creation of digital services in complex and highly individualized business domains, from the system infrastructure to the user interface required to perform operations and related tasks.
Data platform*
Data platform and business intelligence functions that can be used for advanced data science and marketing automation are available immediately after the system is released.
The benefits of introducing a data platform are becoming significant for digital businesses that require complex business operations and data integration, such as online marketplaces (B2C/B2B), order and supply platforms, OMO stores, cloud EDI, business matching platforms, and others. Plain is being introduced and considered for DX projects in a variety of industries, including retail, manufacturing, and real estate businesses that want to launch digital platform services utilizing real assets such as stores and factory facilities, and distribution and brokerage businesses that want to launch matching platform businesses utilizing domestic and international business partner networks. Plain is now being introduced and considered for DX projects in a variety of industries. In the future, we intend to contribute to improving the speed and improvement of the launch of digital businesses at client companies by focusing on the data base, expanding functions, and customizing industry-specific functions. We are aiming to have more than 100 contracts for "Plain" business in the next 5 years.
About the Organization
ROUTE06 has renewed its mission and values as it enters its third year in business, and has formulated a new Purpose (the company's raison d'etre) and Credo (the organization's way of thinking). We have set our Purpose as "Define the route to the future," and as a DX partner for reformers of major companies facing the solution of complex business issues, we provide the latest digital technology and system infrastructure, and support by a professional team for launching digital businesses, in order to create new business opportunities that leverage the existing assets of major companies and to help them to grow their businesses. We will take on the challenge of creating new business opportunities and economic value by leveraging the existing assets of leading companies by providing the latest digital technology and system infrastructure and supporting them with a team of digital business start-up professionals. Our credo is "Be a disruptor" and we aim to be an organization that can gently and smoothly propagate the passion for change to all stakeholders.
Based on this premise, we will aggressively invest the funds raised through the Series A round in order to create an environment where our employees and business partners can demonstrate their individual strengths more than ever and where opportunities for growth abound. We believe that one of our missions is not only to provide better customer service, but also to become a company that can produce as many professionals as possible in an industry where there is a shortage of digital human resources.
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We pursue the creation of an asynchronous and easy-to-work-in environment by utilizing GitHub as the company-wide workspace and making full use of online collaboration tools such as Slack and Figma. In addition to the 20 days of annual paid leave granted upon joining, we have designed systems like Sick Leave, Relaxation Leave, and a Childcare Leave Benefit Supplemental Allowance, allowing employees to choose the work style that best supports their performance. We will continue to expand these systems to ensure they align with employees' personal lives. We will continue to expand these systems to ensure that each employee's life is not compromised.
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With an eye on hiring new graduates, we will expand training support and other programs that encourage learning opportunities for each individual to make the most of their future careers, including the improvement of product development skills. In addition, we will make internal documents such as various guidelines including onboarding, as well as learning and knowledge gained through projects, into assets on GitHub, so that anyone can obtain necessary information when necessary, as well as promote an open source culture where people can propose improvements and actively learn from each other. We aim to create an organizational environment where everyone can actively learn from each other.
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Since our first year of operation, we have focused on our information management system, including the introduction of mobile device management (Jamf Pro), in order to achieve both the reliability of a listed company and the agility of a start-up company. We will continue to strengthen our corporate engineering team and invest in the acquisition of ISMS certification, etc. by the end of FY2022, as well as in the realization of SOC2+ reporting level internal controls in the future.
In the next five years, we aim to increase the number of employees in our organization to 200, approximately seven times the current number, and by focusing more than ever on building a remote-first system, we will build a foundation that attracts a more diverse workforce from Japan and overseas. As a company that supports advanced DX projects for major companies, we at ROUTE06 aim to be the most DX-oriented organization in the world, and we will continue to build a foundation that attracts a more diverse workforce both domestically and internationally. As a company that supports advanced DX projects for major companies, ROUTE06 believes that we ourselves should aim to be the most DX-oriented organization and continue to update our company's overall philosophy and structure, and we will actively challenge new ways of working.
As stated above, we will continue to do our best to become a more valuable company for our stakeholders by accelerating investment in our products and organization.
About the Author
Takafumi Endo is a graduate of the Graduate School of Information Sciences at Tohoku University. After graduation, he worked at the Development Bank of Japan Inc. and Dream Incubator Inc. He then founded Smarby, Inc., where he served as CEO. After the company's acquisition by a major apparel company through an M&A, he became Director, CPO, and CMO at STRIPE DEPARTMENT CO., LTD. Following his involvement as an EIR at Delight Ventures, Inc., he founded ROUTE06 and became its Representative Director.
