Tokyo Otaku Makes Global Bet That Fantasy World Will Yield Real Profits

Source: BRS on TV

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Source: BRS on TV

The Strength character figurine by This Good Smile Company Nendoroid from the TV Animation version of Black Rock Shooter.

As Japan looks for new ways to promote its culture overseas, one startup devoted to the fantasy worlds of anime and cosplay has already attracted a real global following.

Tokyo Otaku Mode, a news website that sells goods from Japanese artists and designers, has more than 13 million Facebook "likes" and counts almost all of its users as coming from outside the country. And the 60-person startup is planning for more international growth.

"We want to target people overseas," Chief Executive Officer Tomohide Kamei said in an interview earlier this summer from the company's workspace, which is comprised of an investor's garage and basement in Tokyo's high-fashion Aoyama neighborhood. "I wanted to create a business that rewards Japan makers and helps them tap global markets."

Although Tokyo Otaku wouldn't disclose its number of users, the English site has a strong following in the U.S. and Southeast Asia, such as Indonesia, the Philippines and Malaysia, according to Takuya Akiyama, one of the co-founders. He said the company is considering other languages, such as Spanish and Chinese.

As for the 13 million Facebook "likes," compare that with 17 million for another fantasy world, Disneyland.

The term "otaku" is used to describe a person obsessed with a particular aspect of pop culture, such as anime, manga and video games.

Through Tokyo Otaku's website, Japanese artists and designers can sell everything from anime-inspired posters to Hello Kitty lunch boxes. Featured artists post original art inspired by the virtual idol Hatsune Miku and the hit manga series "One Piece."

As part of its expansion plans, the company is in talks with investors, including existing shareholders Yahoo Japan and Itochu, to raise about 100 million yen ($1 million) to hire more staff, Kamei said in a phone interview this month. Tokyo Otaku, which was incorporated in Delaware, is also partnering with some of Japan's largest companies to increase its presence abroad.

Lawson, the second-biggest convenience store chain in Japan, set up a website with Tokyo Otaku in March featuring anime characters to promote the retail company's services and products. Lawson is looking to buy or invest in drug stores in the U.S. and Europe. ANA, Japan's largest airline, teamed up with the portal in a campaign to lure tourists through cosplay and even latte art.

Tokyo Otaku's fund-raising plan follows one in February when it raised about 50 million yen. The second round of funding may be completed by November, Kamei said.

"Kids in many countries grow up with manga and anime," said Benjamin Joffe, an early investor in the company. "There are very few Japanese companies that set out to be global from day one, and Tokyo Otaku is one of them. Nine out of 10 users are outside Japan."

Before starting Tokyo Otaku with Akiyama and four others, Kamei, 36, worked at Cyber Communications, a wholly owned unit of Dentsu, Japan's biggest advertising agency. He also helped Twitter start its service in Japan.

When it was set up in April 2012, Tokyo Otaku got funding from Dave McClure's 500 Startups. The Mountain View, California-based fund provides early stage startups with up to $250,000, along with hand-holding from its global network of mentors.

Tokyo Otaku's overseas push comes as Prime Minister Shinzo Abe plans to set up a 50 billion yen fund to promote "Cool Japan," an ongoing effort to highlight the country's culture abroad as a way to increase exports.

"Tokyo Otaku Mode plays into the Cool Japan growth strategy of exporting content, such as anime," said Toshihiro Nagahama, chief economist at Dai-Ichi Life Insurance Research Institute in Tokyo. "You can use characters to sell products."

Still, to what degree these fantasy worlds translate into real profits for Tokyo Otaku remains to be seen. The company would not disclose revenues.

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