Japan’s E-Commerce Pioneer Gains $2 Billion After Partnering With Japan Post, Tencent And Walmart

Hiroshi Mikitani speaks during a Bloomberg Studio 1.0 interview at the company’s headquarters in San … [+]

Hiroshi Mikitani saw his fortune jump by nearly $2 billion as shares of his e-commerce firm Rakuten soared 35% during the past two trading sessions. The Tokyo-based company announced plans on Friday to raise $2.2 billion by selling new shares to several big-name investors to fund the roll out of its mobile carrier business.

Mikitani, CEO and chairman of Rakuten, will add another 4.4 million shares to his shareholding, although his overall stake will be reduced from 39.3% to 34% after the transaction. His net worth now stands at $8.6 billion.

“These new investments in Rakuten indicate both high expectations for the growth and impact of the Rakuten ecosystem with the mobile service at its core, as well as great potential for further collaboration with leading companies from the world’s three leading economies,” Mikitani said.

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Japan Post, a former state-owned utility that was later privatized, will become Rakuten’s second-largest shareholder with an 8.3% stake. The tie up between the two companies will combine Rakuten’s more than 100 million users with Japan Post’s nationwide delivery network of about 24,000 post offices.

China’s Tencent will gain a 3.6% stake in Rakuten. The companies see digital content and e-commerce as potential areas for collaboration. U.S. retailer Walmart will pick up a 0.9% stake.

Rakuten aims to leverage its massive customer base already using its e-commerce, credit cards, internet banking, online trading and content to also sign up for its mobile service. Since launching last year, the service has so far attracted about 3 million users.

Mikitani says, “Our operation is much leaner than our competitors, and we can enrich the service using the existing Rakuten ecosystem. And I don’t think people really care whether it’s NTT, SoftBank or Rakuten that much. It’s primarily about connectivity, speed, price and what kind of extra services we can provide.”

Rakuten’s effort to build a mobile network in Japan comes as it also battles Amazon and other rivals for a greater share of the country’s e-commerce market. Rakuten’s sales rose 15.2% last year to nearly 1.46 trillion yen ($13.3 billion), but the company swung to an operating loss of 102.7 billion from a year earlier. Rakuten said the loss was due to the heavy capital expenditures attributed to the rollout of its base stations for its mobile carrier unit.

Mikitani was on the forefront of Japan’s internet revolution. He started Rakuten in 1997 with one other partner, Shinnosuke Honjo, who is no longer at the company. A cross between Amazon and eBay, the online market site had annual revenues of nearly $30 million when Rakuten went public in 2000. The company plans to change its name to “Rakuten Group” on April 1.

I’m a senior editor based in Hong Kong. I’ve been reporting on Asia’s wealthiest people for Forbes and Bloomberg for about a decade. Previously, I worked with British

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