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Mercari, a rare Japanese unicorn, soars 76 per cent in debut

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Flea market app operator Mercari Inc's shares surged 76 per cent in their Tokyo stock market debut on Tuesday morning, underscoring strong investor appetite for a rare Japanese unicorn.

[TOKYO] Flea market app operator Mercari Inc's shares surged 76 per cent in their Tokyo stock market debut on Tuesday morning, underscoring strong investor appetite for a rare Japanese unicorn.

Shares were trading at 5,280 yen in late morning trade, valuing the company at about US$6.5 billion. That makes it the most valuable firm on the Tokyo bourse's Mothers market for start-ups, ahead of games and social network company Mixi Inc and robotics firm Cyberdyne Inc.

A popular smartphone app that allows people to trade used items online, Mercari has been downloaded 71 million times in Japan where it has 10.5 million active users. It expects sales to jump 62 per cent to 35.8 billion yen (S$437.8 million) this financial year.

Its IPO, the biggest in Japan this year, raised US$1.2 billion through the sale of around a third of Mercari's shares, with the majority bought by overseas investors.

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The company is profitable at home but loss making in the United States, where it is headed by former Facebook Inc executive John Lagerling. Its US expansion dragged it to a net loss of 4.2 billion yen in the last financial year.

In a country that has many successful giant corporations but lacks a vibrant startup culture, Mercari gained attention as one of Japan's two unicorns - startups with valuations above US$1 billion - according to data provider CB Insights. The other is information technology startup Preferred Networks Inc.

Mercari's growing popularity as Japanese shoppers shed their inhibitions about buying and selling used goods has seen it join the ranks of companies such as Uniqlo parent Fast Retailing Co Ltd that have grown by appealing to consumers' economising instincts.

The app has outperformed rivals with its focus on mobile, its ease of use - with users able to trade goods with just a few taps - and by offering anonymity to its privacy conscious Japanese audience.

REUTERS