Sekai Lab raises $3.3M to crowdsource offshore app development

(By Masaru Ikeda, The Bridge) – Tokyo-based Monstar Lab, the company that provides crowdsourced offshore app development service Sekai Lab, announced today that it has fundraised 400 million yen (approximately $3.3 million) from Pasona Tech and DG Incubation. Pasona Tech is a system engineer focused-recruiting company of Japanese leading human resources conglomerate Pasona Group while DG Incubation is an investment arm of Japanese internet giant Digital Garage.

Regarding partnership with Pasona Tech, Sekai Lab will work with Pasona Group’s about 1,000 sales representatives and Pasona Tech’s 70 representatives, helping Pasona’s clients outsource their system development needs to more than 10,000 engineers who are working based out of Sekai Lab’s locations in 15 countries worldwide. According to Pasona Tech, job-offers/-seekers ratio in the company’s business has reached eight-to-one, indicating that it is difficult to cover the demand for human resources with Japanese engineers only. Due to the emerging demand for mobile app developers from clients, Pasona Tech decided to partner with Sekai Lab as part of efforts to decentralize the human resource supply sources, such as hiring engineers from rural areas in Japan.

Having established a subsidiary in the US this September, Sekai Lab has started its local operations based out of San Francisco and Los Angeles. Coinciding with the latest funds from DG Incubation, Sekai Lab will set up an office in DG717, a co-working/incubation space in San Francisco run by Digital Garage, in order to cultivate app development demands from the fintech and digital marketing industries in Silicon Valley. Since Digital Garage has no in-house development team, Sekai Lab also aims to receive outsourced projects from Digital Garage and its invested companies.

Sekai Lab’s outsourcing service allows clients in Japan and the US to reduce the cost for app development down from a half to one-third that of a typical in-house development scheme. By arranging for an engineering team in Asia as well as appointing project directors in Japan or local “bridge system engineers,” Sekai Lab enables smooth app development process which will meet their client needs on a project-to-project basis.

In view of outsourced offshore app development, improving the quality of local engineers and securing their loyalty are quite important. Focusing on these points, Hiroki Inagawa, CEO of Sekai Lab and Monstar Lab, revealed that his team is making efforts to increase satisfaction of engineers by providing them jobs requiring high-level skills as well as creating a comfortable and friendly working atmosphere.

Our engineers (based overseas) are gaining the image that our company is rapidly growing. For instance, our lab center in Da Nang, Vietnam consists of 200 engineers working there, so local people think that we are one of the leading systems engineering companies around.

In contrast with Japanese companies where the seniority system still remains, our people are performance-oriented and can work while caring for delivery time and attendance management. Offshore development is a trend of the times. By standing in the middle between engineers in offshore locations and Japanese companies which are less likely to take risks, we want to help our clients fill their demand for human resources.

Founded back in 2006, Monstar Lab launched indie music service Monstar.fm and background music service Monstar.ch, followed by incorporating Sekai Lab as a wholly-owned subsidiary in Singapore in February of last year. Prior to the latest round, the company fundraised 120 million yen (about $1.2 million at the exchange rate then) from East Ventures, SMBC Venture Capital, and Mitsubishi UFJ Capital back in August of last year.

Edited by “Tex” Pomeroy