SYLA Technologies NASDAQ Listing Commemoration Global Strategy Press Conference
Thank you all for waiting. Thank you very much for joining us today. We would like to start the global strategy press conference to commemorate the listing of SYLA Technologies. My name is Rumi Ayukawa, and I will be the moderator for today. Thank you very much. [Music]
SYLA Technologies Co., Ltd. was the first Japanese real estate company to be listed on NASDAQ in the United States on March 31, 2023. Today, Hiroyuki Sugimoto, CEO, Co-President and Director of SYLA Technologies, will report on the listing on the NASDAQ Capital Market, and announce the global strategy of Rimawari-kun, which is the main business of the company.
First of all, I would like to show you the movie of the listing ceremony held on April 10th at the NASDAQ headquarters in the United States . Please pay attention to the front monitor. [applause] [music] [music] [music] [music] Hello everyone.
I am Hiroyuki Sugimoto, CEO, Co-President and Director of SYLA Technologies. Thank you very much for taking your time for our global strategy press conference to commemorate our NASDAQ listing. First of all, I became the first founder in Japan and the United States, and also we became the first real estate company in Japan to be listed on NASDAQ Capital Market, We were able to achieve this listing thanks to the support of many people, including our staff, customers, shareholders, business partners, and everyone involved. Once again, I would like to express my sincere gratitude to all of you. Thank you very much. Now I would like to begin.
This is our company profile. This is our management philosophy. Our mission is “Enriching the 100-year life era with technology and asset management” and our vision is to “Love and technology enduring beyond the century.” I often tell my employees that technology alone is not enough, love is important. We would like to solve various social problems in this country through the asset management platform. This is what is behind our target. Collectively, as a big vision, our mission is to democratize real estate investment around the world.
This is the table of contents. First, I would like to announce the results for the fiscal year ended December 31, 2022. Regarding the business structure of our group, we have the crowdfunding business, sales of investment apartment, sales and brokerage of whole residence and building through Rimawari-kun Pro, and the sale of a solar power plant. And as the funds accumulate through Rimawari-kun crowdfunding, asset management, and rental management and building management are collectively called the asset management business, and these are the business structure of our group. Over the past three years, net revenues have grown very strongly, reaching ¥13.1 billion, ¥16.6 billion, and ¥22.0 billion.
We also achieved very strong growth in gross profit in proportion to sales, from ¥2.8 billion to ¥3.1 billion to ¥3.6 billion. Next, let's look at the trend in sales over the past 12 years. We have changed the accounting period in 2016, which is in the middle of the graph, so we have had virtually 12 consecutive quarters of revenue growth, thanks to the support of many people.
As for the condensed income statement, or PL, net revenues increased to 132% of the previous fiscal year. Also, I would like to draw your attention to the fact that for this IPO, there were fees for lawyers, audit firms, and lead underwriters, which amonted to ¥370 million, so the SG&A expenses are almost at the same level and in a controllable state. Our revenues and incomes are growing strongly. And on the balance sheet, our current assets have also grown to 160% of the previous FY. Funds and inventories are steadily accumulating. And what I would like you to pay attention to is The 1.85 billion raised this time is purely on this shareholders' equity.
The profit for this FY will be further added to this, so the balance sheet for fiscal 2023 will be even more robust, and the balance sheet will expand. Next, I would like to talk about our business. We are primarily focusing on the real estate crowdfunding business, which is currently in the third place in the world. The number one company is FUNDRISE, which has 387,000 members and the AUM of 200 billion. And in second place is REALTY MOGUL. We flew to New York, and then to Los Angeles,
to meet with investors and various people, and we also had a meeting with REALTY MOGUL, which has 274,000 members and the AUM of 100 billion. And we, SYLA Technologies group, have 255,000 members and have reached about 80 billion yen in AUM. It has only been a year and a half since we launched the service, and we are already vigorously chasing these global companies. This is about the real estate crowdfunding market we are focusing on.
The market in Japan has grown twofold and threefold in recent years. But the global market has also grown threefold over the last four years. At this pace, it is predicted to grow fourfold and fivefold, so it will reach ¥1.5 trillion in 2026, according to the data here. In this strongly growing field, we have decided to focus on real estate crowdfunding in this strongly growing market, as well as single-person apartment and solar power. And, I would like to briefly talk about real estate crowdfunding. To put it simply, I think that many people have had the impression that real estate investment is something that the rich people do, where they have to borrow tens of millions of yen.
I want to get rid of such images on real estate investment. And in the real estate crowdfunding system, investors share the risk of the real estate investment. each person puts in an investment amount from 10,000 yen, according to the risks that each person can take.
This is the real estate crowdfunding system. And in this real estate crowdfunding market, the international market is growing 3 times year by year, and Japanese market is growing 2, 3, 4 times. We have 255,000 membership, which is the number one share in Japan. We believe that the reason why we have been able to achieve such a high market share is because of these three strengths. One is our unique marketing utilizing AI.
I would like to explain this in detail later. Another point is our development of exclusive marketing in the real estate crowdfunding through our capital and business alliance with Rakuten Group. Rakuten Group introduces our Rimawari-kun services through their website with our banner ad, and through their email.
And the customers who joined us via Rakuten services will receive 1 Rakuten point every day just by logging in Rimawari-kun. In addition, they can receive 100 points on their birthday. 150,000 points when you buy something with our service.
Rimawari-kun can collect the largest number of Rakuten points. Therefore, it is also beneficial for Rakuten customers, so many Rakuten users use Rimawari-kun. And the other big strength is our unique contents. Let me show you some of our unique contents. This is our representative fund. Together with Mr. Horie, Interstellar Technologies,
we raised a fund to built rocket factories. It was originally a project that the banks declined to finance. However, we decided to help to realize the vision of IST with our individual power, together with many customers and fans.
As a result, we were able to raise 700 million yen to build 3 factories. What happened was that IST was able to direct their investment purely towards corporate growth, as we undertook the investment in this real estate sector. And IST has grown, and raised 3.8 billion yen in series D, with SBI, CyberAgent Group, and Kadokawa, among others, and IST achieved further great growth as a rocket development company. Also, Taiki Town, where IST is headquartered has a population of only 5,400. But 12,000 people were going to gather for the rocket launching. However,
the infrastructure was not sufficient to accomodate these population. So, IST was able to invest in infrastructure development, such as building dormitories and shops. As a result, the town's population increased for the first time in 23 years, GDP increased significantly, and the value of the surrounding real estate we invested in has doubled. This was originally a project that the banks declined to finance, however, we redeveloped the region, together with our customers, our fans, IST, and the government of Taiki Town. We have achieved this with our individual powers, even though the banks said no.
We are still planning to work on various projects with IST in the future, so please look forward to it. Another representative fund is INUNEKO Hills fund, which we created together with Mr. Maezawa. I also serve as a director of Mr. Maezawa 's foundation. We have been friends and good rivals for 20 years.
Mr. Maezawa is working to eliminate the euthanasia of dogs and cats. And since he is always visionary, the two of us discussed one of the problem would be that we can't keep pets in apartment in the city center, and if we could solve this problem, we could reduce the number of animal euthanasia in Tokyo. Then, let's make an apartment where residents can have multiple dogs and cats. At first, the bank declined to finance this project as well. However, Mr. Maezawa suggested making dog runs, catwalks,
foot washing areas, lead hooks, as well as making materials that would not easily deteriorate even if cats sharpen their claws, or dogs run around. We worked on various things like these, and also thanks to Mr. Maezawa's donation, we completed a condominium called INUNEKO Hills. Next to the INUNEKO Hills happens to be an animal hospital, a pet hotel, next to it there's a convenience store, a laundromat, a supermarket, and next to that there's a park, and across the road is the Tama River. It was such a miraculous location that we have started the project, and the fund raise was a great success thanks to the support of many customers. When we launched the first round of the fund, then, the banks offered to finance.
For what is generally considered difficult, but for which we believe there is demand, I believe that there are things that we, as individuals, can create with our customers and fans, even if the banks say no. I believe that this is one of the charms of Rimawari-kun. Another reason we are growing strongly is the macro environment, or the business environment surrounding our platform. One thing is that Japan has the world's second largest personal financial assets of ¥2,000 trillion, of which as much as 1,100 trillion yen, or 54%, is deposited in banks, which is something peculiar about Japanese people.
If you look at Americans and Europeans, deposits are only about 20%. Instead of deposit, they invest. Why Japan has become so poor? Now Japan's GDP per capita is the 30th in the world.
It is already overtaken by South Korea. It is often said Japanese people have become poor. One of the big factors is that we concentrate on deposits with interest rates of only 0.01%.
In response to this, the current Prime Minister Kishida says that Japanese people must wake up and shift from savings to investment. I feel that Japanese people's mindset is beginning to change. The other point is the government debt outstanding, which amounts to 2.5 times the GDP. And the amount of our personal contribution for social security is steadily increasing.
I think it's certain the personal contribution ratio will eventually increase to 30%-40%. The pension age is getting late, and the amount of pension is getting less. Everyone knows that social security costs are getting more and more severe for the time being. Pensions alone, retirement allowances alone, or deposits alone will no longer sufficient to live on in retirement. I think probably 90% of Japanese people began to realize this. To reach out this issue, we must encourage asset management through our real estate crowdfunding service.
I belive that the changing mindset of the people is also a very large follow-up window for our platform. Another big thing is that online transactions in the real estate industry, which had been zero, finally started on May 16th last year. I often say that the day will come for sure within 10 years, when all real estate transactions will be completed on smartphones. Metaverse technologies such as AR and VR are progressing rapidly, and I believe that, in furure, property guidance and transactions will be completed online on smartphones. Online transaction will continue to grow over the next few decades.
For example, Internet banking has become commomplace. Nowadays I don't see a person who goes to a bank with a registered seal and a bank book to withdraw money. It may take place in the countryside, though. The internet banking utilization rate is currently about 70%, which will further increase in the future. So are securities. I don't think there are many people who have placed orders for securities over the phone recently.
Online transactions for real estate, which was zero until last year, will continue to grow for decades from now, as like those for banks and securities. That is why we have decided to focus on the proptech industry and the field of real estate crowdfunding and make strategic investments in the growing field. And one more thing, regarding business, we have established the Investment Business Division. In fact, our company have invested in various proptech companies through our CVC (corporate venture capital). Some of them are already listed. In fact, we have invested about 450 million yen including companies that have not exited, and have already earned 1.6 billion yen.
The securities company says this is already a business. From the past 10 years, we are firmly convinced that we have a role to play in corporate growth as an accelerator. In this growing field of proptech, we have continued to invest in company worthy of investment, interviewing with the management, carefully looking at the market, In order to expand our scope to include listed companies and form strategic business alliances with them, We would definately like to use the funds we have procured. For this reason, I have appointed Mr. Nuriya from Blackstone to be in charge of the business.
We would like to actively invest in this proptech field as well. Now let me talk about global strategy for Rimawari-kun. As I mentioned earlier, the number one global real estate crowdfunding company is FUNDRISE, with 370,000 membership and the AUM of ¥200 billion and the number two is REALTY MOGUL with 270,000 membership and the AUM of ¥100 billion. I would like to earnestly aim to become the world's number one because there are opportunities. I made 5 strategies. The first is the introduction of Rakuten ID Connect option,
in short, linkage with IDs of Rakuten Group. If you have ever used this EC websites, you have to enter your name, address, email address, other status, and register your credit card. I think many people have left the website at this point. The same is true for our website. About half of the people drop out before completing registration as an investor.
By linking the ID, you don't need to input anymore. , which leads to overwhelming improvement of UX and usability. It can be shortened to 3 minutes on our current website. And furthermore,
we will release an app in June. Rimawari-kun app. With this, if you have a My Number Card, or if you are a Rakuten user and have a My Number Card, you can start real estate investment in just one minute by simply holding your smartohone over your My Number Card. This is exactly the overwhelming usability and UX improvement that we have been aiming for. This will
reduce the number of customers who leave in the middle of registration by 50%, which will lead to an even more powerful, overwhelming increase in membership. And another point is that you can now convert Rakuten points and Rimawari-kun coins. In short, you will be able to invest with Rakuten points. I think there are many customers who use rewards points for investment, but I often see on websites the interest rates of about 0.8%, or often 0.5%. Sometimes no profits are made. If you are investing with Rakuten Points, I encourage you to convert them to our Rimawari-kun Points You can start investment from 10,000 yen. The average yield is 4.4%, so
you will enjoy a 5 to 6 times investment yield, so if you are having trouble with point management, I recommend that you to change your points to Rimawari-kun points and manage your points with Rimawari-kun. Let me talk about our another strategy. I wish I could announce this together with the local government, but let me introduce the concept for today. GRCF, or Government Real Estate Crowdfunding, which may sounds like a bit exaggerated title. This is a project to revitalize "non-performing assets" owned by local governments, such as public facilities operating at a deficit, through public-private partnership such as PFI or PPP. We are going to address this issue through our Rimawari-kun platform.
Together with the government and the local community, we will work together to revitalize this negative asset through crowdfunding. For example, I've already spoken with a mayor of a certain municipal government, whose municipal housing is working only 50%. Just by running these facilities, the city has a deficit of ¥200 million a year. This is paid by your taxes. Large-scale repairs will cost ¥500 million, in addition to the annual deficit.
Rebuilding will cost ¥1.5 billion. So it means, whichever way you choose, it will be hell. This is not just about municipal housing. In order to maintain closed school facilities, ¥80 million a year is used for the sake of regional safety. There are parks where no one is resting. ¥50 million is used to maintain them. There are already many non-performing municipal assets and legacies, for which our taxes are used.
We will revitalize these non-performing assets and facilities with the power of the private sector. With the investment from Japanese public, we would like to realize rehabilitation of the facilities through our real estate crowdfunding. As a first step, we would like to work on childcare support housing. The local municipalities would want to attract households that will lead to population growth. So I believe our proposal is attractive for local governments.
For households in need of childcare support, single mothers, and single fathers, it is necessary to visualize where and how subsidies are being spent. And the local government grant a subsidy for part of our rebuilding project costs, and, revitalize the non-performing assets with the real estate crowdfunding service, with the power of the Japanese public's assets. It will benefit the Japanese public, reducing the drain of our taxes, revitalizing the non-performing facilities. We can also generate yield of rental income for investors.
This is revitalization project on the internet through private-public collaboration. This is what we are proposing to many municipalities. We hope to make an announcement on this project by the end of the year. We have started joint research with Okayama University on the childcare support housing. What kind of impact will be brought through this Industry-Government-Academia collaboration to the society, to public, to GDP? We have heard a lot of voices from the public saying what is the destination of subsidies, and that tax money is being used in a unreasonable way. We will steadily quantify and visualize them through our joint research and clearly show the path we should take, and promote this GRCF initiative through the industry-government-academia collaboration.
We would like to promote the GRCF, government real estate crowdfunding initiative as one of our pillars. And finally, we will launch a campaign. The first 200 customers who subscribe to Rakuten Mobile will receive 5,000 points! This is a big deal.
We wanted to give a little something back to Rakuten for all what they've given us, so we launched this campaign. We hope you will take advantage of it. In conclusion, we would like to take the listing on NASDAQ as an opportunity for our global expansion in the future, democratize real estate investment around the world, and become a globally recognized company. On May 15th, we would like to present the financial forecast and dividends for the current period, as well as various updates of our business. I believe that we will be able to make exciting announcements for investors.
Please look forward to our announcement on May 15, when the quiet period finished. This concludes my presentation. Thank you very much for your attention. Mr. Sugimoto, thank you very much.
2023-05-08 02:02
