TOKYO -- SODA, an online Japanese marketplace for sneakers, said on Thursday it raised $22 million in a funding round led by SoftBank Ventures Asia amid the country's growing interest in sneaker resales.
The startup's SNKRDUNK site allows users to buy and sell rare sneakers that quickly sell out when they are released by the shoemaker. It differentiates from a general marketplace like eBay by certifying the authenticity of footwear, which can cost hundreds of dollars a pair. The company was founded in 2018 and has 2.5 million monthly users in Japan, according to SODA, which generates revenue by taking a cut from each transaction.
The series B round -- SODA's second major financing play -- comes less than a year after it raised $3 million in 2020. CEO Yuta Uchiyama said in an interview that he "decided to double down because the business was growing faster than expected." Gross merchandise volume in December grew over 3,000% compared with 2019, according to the company.
Uchiyama said he believed the COVID-19 pandemic did not have a significant impact.
SODA plans to use the proceeds to invest in domestic operations, including customer support and its authentication process, as well as to expand in Asia. SoftBank Ventures Asia is expected to provide support through collaboration with its portfolio companies.
The sneaker resale market has been booming in the U.S., with the biggest operators fetching eye-popping valuations. In December, U.S. based StockX said it raised $275 million at a $2.8 billion valuation.
Japan's market is comparatively small but Uchiyama said sales of sneakers and other streetwear can reach annual gross merchandise volume of 100 billion yen ($960 million). And competition is heating up. Monokabu, another sneaker resale site, raised 450 million yen in December.
The deal marks a rare investment in Japan for SoftBank Ventures Asia, SoftBank's $1.3 billion early-stage venture capital arm, which invests across Asia. SODA is the second investment in a Japanese startup, the first being in 2014 in digital content provider Cocone.
JP Lee, CEO and managing partner of SoftBank Ventures Asia, told Nikkei Asia that the company was "looking for a fast-growing, consumer-to-consumer vertical marketplace across Asia that can create direct synergies" with its AI portfolio companies. "SNKRDUNK is best-positioned to expand its service to the global market by applying the latest AI technologies to automate operations such as logistics, inspections and recommendations," he said.
SoftBank Ventures Asia is known as an early backer of Indonesian e-commerce company Tokopedia, an investment currently managed by SoftBank's $100 billion Vision Fund.
Japanese investors Basepartners, Colopl Next and The Guild also participated in SODA's funding round.
Yifan Yu contributed to this story