Founded in December 2013, the service taps vetted engineering teams in affordable markets – Vietnam, China, and Bangladesh make up the top three – to produce websites, apps, games, and other online services. It also provides translation and localization services to ensure that language barriers don’t get in the way. Clients in Japan, Singapore, and the US can save up to 75 percent on development costs by outsourcing with Sekai Lab, the startup claims.
The series A investment was made by DG Incubation, the venture capital arm of Japanese internet services firm Digital Garage (DG), and Pasona Tech, the IT-related outsourcing division of human resource services conglomerate Pasona Group. Sekai Lab is a wholly-owned subsidiary of Monstar Lab and is operated as an internal startup.
Sekai Lab will also enter into business alliances with both companies. The startup, which recently launched a US subsidiary, will use DG’s San Francisco-based co-working space and provide crowdsourced engineering talent to DG, its investees, and its clients in the US and Japan. It will also share its network of South and Southeast Asia-based engineers with Pasona Tech and the firm’s existing client base. Pasona Tech will, in turn, assist the startup with sales and business development.
When we last spoke to Sekai Lab, the service had a pool of 3,000 engineers in 10 countries. In just over a year, those numbers have increased to more than 10,000 engineers in 15 countries.
While the startup doesn’t disclose revenue figures, COO Ikkei Okuma tells Tech in Asia that project requests have increased seven-fold since last year, when the figure was pegged at JPY 400 million (US$3.3 million). With the size and scope of projects also growing, Okuma estimates that this year’s project requests have skyrocketed to JPY 10 billion (US$82.3 million). Bear in mind that that figure includes its engineering teams’ commissions, which fluctuate by market and are also undisclosed.
Some of Sekai Lab’s existing clients include Toyota, Procter & Gamble, Rakuten, Gumi, and Konami. The startup raised US$1.2 million in seed funding from East Ventures, SMBC Venture Capital, and Mitsubishi UFJ Capital in August 2014.
According to CEO Hiroki Inagawa, the fresh investment will be used to strengthen sales and marketing in each of the five countries where Sekai Lab operates a local subsidiary: Singapore, the US, China, Vietnam, and Bangladesh. It will also go toward potential acquisitions in India and the Philippines in order to speed growth in those markets, as well as an increased presence in Vietnam with new offices planned for Hanoi and Ho Chi Minh (its current base there is in Da Nang).
While Sekai Lab has enjoyed early success in much of South and Southeast Asia, making a mark on India and the Philippines could prove challenging. The world’s top eight outsourcing cities are located in those two countries, so incumbent competitors abound.
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