“Big chance for a startup like us to consolidate”: Kazuhisa Takahashi
Life after IPO in 2022 hasn’t changed that much for tripla’s CEO and co-founder Kazuhisa Takahashi, although he admits that for the first six months after listing in the Growth Market section of the Tokyo Stock Exchange, he would check stock prices everyday and read the comments from invested parties.
“Now I changed. I care more about our business growth and the need to hit revenues and profits, that’s more important than daily stock price. And I am still living in my small house, driving the same car,” laughed Kazuhisa who started tripla in 2015 with founder Kaku Toriu, both formerly from Amazon.co.jp, to develop hospitality tech solutions for hotels.
Kazuhisa Takahashi: “I care more about our business growth and the need to hit revenues and profits, that’s more important than daily stock price. And I am still living in my small house, driving the same car.”
The company had originally planned to go public in 2020 – it was close to breakeven point then. “The Tokyo Olympics was coming, so we thought that would be a good time. Instead, what was coming was Covid-19,” said Kazuhisa.
It finally went public in 2022 even though the market wasn’t in such good shape “because we thought the timing is the time we could exit”, he told WiT. Early investors included a mix of hotel companies and VC funds, and it had raised about 1.2b yen (around $7m at current exchange rates) in five rounds of funding. “They were happy with the exit and it allowed us to pursue our plans for growth.”
Acquisitions cover Taiwan, Indonesia, Singapore and Thailand
Growth means expansion outside Japan and that’s one thing that’s changed about Kazuhisa’s life – his business is now regional following three acquisitions in the past six months. In fact, he was in Taipei during this interview, visiting Surehigh International Technologies, an acquisition it announced in Taiwan last December, for which it paid about US$3m in cash. Surehigh, founded in 1998, offers booking engine and channel manager services.
In addition to Surehigh, tripla has acquired Endurance in Singapore and Thailand (January 2024 for about US$400K) and BookandLink in Indonesia (September 2023 for about US$6m). It is also present in South Korea with an office.
Kazuhisa said it funded these acquisitions with a mix of US$5m raised from the public market and loans from Japanese banks. “We are borrowing money for M&A purposes. Japanese banks are willing to lend money, and interest rates are low.”
Its M&A strategy involves buying its competitors. “All the companies were doing the same thing basically. By consolidating and transforming, we can achieve efficiency, build stronger products and more security-enhanced products.”
In fact, Kazuhisa said in the hospitality tech space, unlike in e-commerce, there are no one or two giants dominating the market. “The hospitality IT industry is very interesting. There are not so many giant players, but many, many small companies especially in South-east Asia, fighting each other. In Thailand, there are 10-20 companies, Japan 30-50, it is very fragmented.
“But if you think about e-commerce, it is very consolidated. There is a big chance for a startup like us to consolidate.”
While one might refer to Yanolja Cloud as a giant, given its raising of US$1.7b in 2019, Kazuhisa does not see it as a competitor. “They are more B2C, and we can work with Yanolja. We are not interested in B2C.” It is also mindful of names such as Mews and Siteminder but believes it is in a unique position to consolidate in Asia Pacific.
In fiscal year ending October 31, 2023, the company recorded operating revenue of 1,176m yen, an increase of 43.8% from the previous fiscal year.
With the acquisitions, tripla now has doubled its customer base to 6,000 – and it is eyeing markets such as Malaysia, Vietnam, Australia and New Zealand for opportunities.
“We won’t make mistake as other Japanese companies”
Expansion outside Japan is also prompting Kazuhisa to look at business with a different lens. He’s now hiring engineers in Indonesia versus Japan due to costs, and he wants to build a more diverse management team, currently a 30-strong, all-Japanese headquartered in Tokyo. “After IPO, we can add more international people, more women. We can become a more global company.”
He said he would not make the same mistake as other Japanese companies who hire Japanese executives to manage overseas offices. “We want local people to run local offices,” he said, adding tripla was keeping the full teams of Surehigh, BookandLink and Endurance. Pricing models would also be localized depending on market needs.
He and founder Kaku founded tripla in 2015 after they both got tired of selling fashion products on Amazon. “We had to count physical inventory everyday. We wanted to do something in a growth industry, not ecommerce, and we thought of inbound tourism to Japan, which was growing.”
They developed a restaurant menu order app called “umami”. “We wanted to do for Japanese restaurants what McDonald’s was doing – you click to order and the Big Mac is coming. When I went to izakaya restaurants to talk about app services, everybody said to me, ‘Kazu, no Japanese customers will use it. If they want to drink beer, they won’t use smartphone’.
“Now everyone is using it.”
Past Amazon experience convinces him that consumers will want to book hotels direct, not through OTAs
Not one to cry over spilt beer, the two co-founders, in one of their fund-raising calls, visited Fujita Kanko, a Japanese hotel group, which asked them to develop an AI chatbot service for them, and so the Tripla Bot was born in 2017. It added a reservation function in the chatbot and integrated it with channel managers and in 2019, released a booking engine.
Revenues were coming in until Covid hit, but during the pandemic, demand from hotels for tech solutions increased. In Japan, it has a total of 3,000 customers – 80% chain hotels, 20% independent – using its solutions covering chatbot, booking engine, CRM and marketing automation.
Beyond international expansion, tripla wants to develop layers of services into its solutions. “Our objective is to help hotels increase direct bookings and improve customer service.”
He said that while OTAs have become stronger in recent years, he is confident “it is going to change”.
“When I worked with Amazon.co.jp, I told the fashion companies, you guys have to sell through Amazon.co.jp in future. I was wrong. A lot of customers want to buy fashion products on direct site.
“Same with hotels – they know who are their customers, what the customer wants and what kind of information they need to provide. OTAs are good at marketing to get new customers. It is hard for hotels to make a brand on an OTA.”
He said that while “AI won’t light the industry on fire”, it can help improve productivity and enhance AI chatbot services. “But we still need humans to welcome people to hotels.”
Mindful that integration post-acquisition can be painful and can go wrong, he is making it his top priority. “We now have several companies – we need to consolidate services and products – and move in one direction.”
