■Unerry＜5034＞ Company Overview

3. The company's characteristics and strengths

The company's strengths can be broadly divided into the quantity and quality of big data, advanced AI analysis, and a stable profit base through business expansion, cross-selling, and recurring through business alliances.

(1) Real behavioral big data to understand the flow of people outdoors and indoors

The company operates “Beacon Bank,” which has 2.17 million locations and has 120 or more applications (equivalent to 0.42 billion IDs) registered, and accumulates and analyzes both outdoor and indoor data. By accumulating a huge amount of logs amounting to 84 billion per month and holding exhaustive data, it is possible to perform detailed analysis and perform precise understanding of targets and highly accurate estimation. The biggest characteristic of “Beacon Bank” is that it is based on technology*1 patented by the company in Japan, the United States, and China, and is highly difficult to imitate. Furthermore, network effects*2 are also at work at “Beacon Bank,” which is a major factor in maintaining competitive advantage. Also, it is characterized by the fact that privacy is taken into consideration, even when storing human flow data. Interest in privacy is growing at the global level, as represented by the European GDPR (General Data Protection Regulation), and it can be said that it will be a tailwind for the company's business.

*1 Do not limit the number of beacons the smartphone application can catch.

*2 A positive interaction between beacons and the number of app registrations is displayed. The more beacons registered, the more applications will be registered, and vice versa.

(2) Customer success capabilities through AI and abundant know-how

Customer success capabilities to improve customer ROI and sales have been realized by constructing a system for sharing optimal cases in in-house digital marketing with a uniquely developed AI group that means real behavior data. When analyzing accumulated data with AI, “profiling AI (behavioral DNA)” that profiles visit trends in 160 or more location categories, and “means of transportation and situation estimation AI” that estimates means of transportation such as walk/automobile/train, etc., and everyday life/extraordinary things are utilized. Furthermore, they operate “POI visit measurement AI (+ congestion estimation)” that measures store visits and store visits of 2.54 millionPOI (specific points on the map) all over Japan, including building-ins and underground stores, “real recommendation AI” that estimates which stores are likely to be visited next and makes recommendations, and “store visit possibility prediction AI” that automatically targets people who are likely to visit stores. Data is converted into valuable information for customers using “residence/work location AI,” which uses places of stay at night as places of residence and places of work during the daytime, and can also specify attendance rate trends, etc. We are also promoting the construction of a system where optimal cases related to digital marketing are shared within the company. By hiring members with DX and digital marketing experience at retailers and manufacturers, issues faced by customers are accurately grasped, and AI analysis contributes to improving customer performance. In addition, past success stories are shared within the company, and efforts are also being implemented to enhance employees' ability to make suggestions and solve problems.

(3) Growth cycle through business alliances and cross-selling

Until now, the company has expanded its business results by forming business alliances and collaborations with companies representing the industry. Starting with a business alliance with Coca Cola West Co., Ltd. (currently Coca Cola Bottlers Japan Co., Ltd.) for the purpose of data support for retail and restaurants in the 2017/6 fiscal year, industries such as Dentsu Group, Mitsubishi Estate, and Adways ＜2489＞ in the 2018/6 fiscal year, ImpactTV Co., Ltd. in the 2019/6 fiscal year, NTT DATA Corporation (currently NTT DATA Group), and Mitsubishi Corporation and Cainz Corporation in the 2021/6 fiscal year We are cooperating with representative companies. Cooperation with TOPPAN Holdings ＜7911＞, LINE Corporation (currently LINE Yahoo! ＜4689＞), Sumitomo Mitsui Card Co., Ltd., and Google Cloud Japan (same) has been announced for the 2022/6 fiscal year. While cooperating with major companies in the industry, partner customers have been taken in as in-house customers, and business performance has been expanded. According to the company, it is said that recognition as “an enterprise where industry-leading companies collaborate” has spread due to cooperation with Coca Cola West and Mitsubishi Estate. It is expected that cooperation with leading industry companies will continue to accelerate in the future, such as concluding a business alliance agreement with Mitsubishi Foods for the purpose of joint promotion of the retail media network business in 2023/8. We anticipate that the number of customers and performance of the company will expand along with that. In addition to the areas of retail business, consumer goods manufacturers, advertising, community development business, etc., which are the current main battlefields, the company has repeated partnerships in other industries, responds to diverse needs for consumer behavior big data, and aims to become a cross-industry global data infrastructure.

Also, as described above, it is probably characteristic that service groups consisting of “analysis/visualization services,” “behavior change services,” and “one-to-one services” are structured with cross-selling in mind. Thus, the unit price per customer has been raised, and the company's business performance has been expanded. Furthermore, in the case of a customer with 250 supermarkets, it is said that there is also an example where the customer unit price grew to 12 million yen per month, starting with using an “analysis/visualization service”, “behavior change service,” and “one to one service” with a full lineup of “analysis/visualization services,” and “one to one services.”

(4) Profit models that generate recurring

A one-year contract is basically required for the “analysis/visualization service” and the “one-to-one service.” Also, since a model where profits expand as the number of customer stores increases has been adopted for “behavior change services,” it is a profit structure where sales can easily increase continuously and stably. Since effects are visible by using the company's services, the fact that it is difficult to induce customers to leave also contributes to stable profits. In fact, the number of recurring customers in the 2024/6 fiscal year was 109, a significant increase from 78 companies in the 2023/6 fiscal year. The ratio of recurring sales to sales remains at a high level of 90.0% (90.0% for the fiscal year ending 2023/6).

Note that the company's performance fluctuates depending on seasonal factors. Since the busy season for the retail business, which is the main customer, is from December to March, there is a tendency for sales to focus on the third quarter (January-March). On the other hand, since costs associated with the business are incurred throughout the year, there is a tendency for profit growth to decline in the first and second quarters, when sales are relatively small. However, they are working on measures such as services that lead to profit growth throughout the year, and the trend of focusing on the third quarter is improving.

(5) Experienced management team

Mr. Hidetoshi Uchiyama (Uchiyama Hidetoshi), the company's president and CEO, is a specialist who obtained a master's degree in computer science from the University of Michigan Graduate School in the United States. Even after graduating from graduate school, he has a history of being active at global strategy consulting firms Pricewaterhouse Coopers (hereafter, PwC), A.T. Kearney, etc. As for other management teams, there are human resources who have played an active role in PwC, Management Co-Creation Platform Co., Ltd., Accenture Co., Ltd., etc. One of the company's strengths is that a strong management team, starting with Mr. Uchiyama, who is a specialist in the AI and computer science field, stands shoulder to shoulder.

(Author: FISCO Analyst Tomokazu Murase)