US-based General Atlantic has announced a $96m (Y14.6bn) strategic minority investment in SmartHR, a Japanese cloud-native human resources (HR) management platform.
The stake in the Japanese company was acquired from Coral Capital, which will remain a minority shareholder.
This move is General Atlantic’s first growth equity investment in Japan.
SmartHR, established in 2013, offers businesses in Japan a cloud-native platform for managing HR functions.
Its products enable the digitisation of employee record systems and support workflows including labour and talent, time tracking and payroll processing, and compliance with government reporting obligations.
The company states that its products are aimed at decreasing operational overhead, improving productivity and managing workforce data.
General Atlantic, alongside Coral Capital, intends to collaborate with the management team of SmartHR on new product initiatives, strategic collaborations, improved customer support, mergers and acquisitions, and refining its market approach.
General Atlantic has experience in supporting technology companies globally over the past 45 years and holds stakes in several operators including ATOSS Software, Hibob, PayFit, Gusto and Staffbase.
SmartHR board director and CEO Masato Serizawa said: “We are extremely pleased to welcome General Atlantic as our new strategic partner. Backed by their extensive global experience and demonstrated history of scaling HR software businesses, we are confident that they will be a powerful force in accelerating our next stage of growth.
“Through this partnership, we will continue to drive greater corporate productivity and help create more inclusive and fulfilling workplaces for everyone.”
Bloomberg quoted General Atlantic co-president and Global Growth Equity head Martín Escobari as saying in an interview: “About two years ago, we had the hypothesis that there was an entrepreneurial renaissance in Japan and there was a new generation of managers that were creating service companies with high ambitions and high growth.”
Escobari further noted that General Atlantic aims to make two to three additional investments in Japan over the next three-year period remotely, prior to considering building a local office.
The company typically focuses on growth equity investments in mature private sectors including AI, software and robotics.
General Atlantic’s expansion into Japan coincides with a broader uptick in foreign investor activity in the country. In recent years, Japan has experienced heightened interest across private equity, real estate and public markets, as international investors are lured by the depreciating yen and favourable borrowing conditions, reported the media outlet.
Coral Capital stated that this will be the largest deal of its kind ever recorded for a start-up in Japan.
General Atlantic managing director Alex Crisses said its investment will enable SmartHR to stay private for a longer period as part of its growth strategy.
The private equity firm will work with the software start-up on growth strategy including additional fundraising and acquisitions. Plans for an initial public offering by SmartHR are likely to be postponed until 2027 or later, reported the media outlet.
