The 3rd Brazil Japan Startup Forum will be on 14-Feb in Tokyo！
The forum newsletter vol.1 features the whole picture of the forum and Opening Remarks by Brazilian venture capital. From vol.2 onwards, we will provide a series of 18 sessions. This is a Japanese startup session by Eisuke Tokiwa, Amegumi (Startup of US$35 smartphone with original OS)!
Session presented by Eisuke Tokiwa, CEO of Amegumi
About Amegumi | “Blaze Your Destiny – Helping the social vulnerable through digital services”
Amegumi was founded in 2016. CEO Tokiwa specializes in marketing and data analysis, and has experience with three startups. Based on his experience of growing up in poverty and abuse, he wants to support vulnerable groups through digital services. Currently, we are developing and providing smartphones and OSs that are low-cost and long-lasting for low-income earners and focus on the minimum necessary functions. The company has formed an OEM tie-up with a company in Shenzhen, China, and has raised a total of US $ 1.2M from two VCs, including we Brazilian Venture Capital, and 16 angel investors.
Mitsuru Nakayama, CEO of Brazil Venture Capital also sent the following message on the investment.
“Amegumi’s solutions are needed in the world and I am convinced that Tokiwa can provide them properly. Inclusion and empowerment are major issues in Latin America. I’m honored to do that. “(Excerpt from PR Times)
What is SUNBLAZE Phone? | Lower price, long-lasting and simple functions
The major feature is “US $ 35 cost, stable operation for 3 years, simple functions we need”.
For example, in the case of the Android platform, app certification is not strict, and OS updates and hardware designs are performed by manufacturers or Google. This is said to be the main cause of malfunction. For example, in the case of Samsung, etc., about 30% of the selling price becomes gross margin, and replacement occurs due to breakdown in about 1 to 1 and a half years, so it can be said that malfunction in a short period of time is high profitability for manufacturers. .
Therefore, SUNBLAZE Phone has stricter application authentication, OS has been updated with security based on Android8.1, and hardware uses cheap devices by OEM / ODM. It doesn’t have Google Play or What’s Up, but they are developing their own messaging app.
Logo of SUNBLAZE
Business Model | Revenue from In-App Payment and Smartphone Rental
Currently, SUNBLAZE Phone is offered to corporations. The story is “A business purchases, installs the required apps, and distributes them to employees.”
There are two main monetization mechanisms. One is commission income from in-app payments. SUNBLAZE has a mechanism to collect 10% of settlement (30% for Google). The second is a rental model by Smartphone as a Service. Rent a smartphone to medium- to large-scale corporations and collect rental fees while updating the OS. It seems that there is a lot of demand for smartphones that function with security, are hard to break, and are inexpensive for lending to employees. In a case of a Japanese company, a few years ago, a new business smartphone was distributed to all employees.
On the other hand, despite the fact that it has many functions that are not necessary for business and that the lease price is more than US$500 per unit, there is a certain smartphone for the reason that there is no other choice but unavoidable. Selected. It is thought that various companies in Japan and overseas have such troubles.
Presentation for the business model of Amegumi
Positioning | Differentiate with low-end and proprietary OS
Unlike Google and Apple, SUNBLAZE focuses on low-end customers and takes on a position where malfunctions do not easily occur with proprietary OS. There is also a question that “ Isn’t it imitated by existing players? ”, But when you pick up the Indian market, as of the first quarter of 2018, Xiaomi, which offers cheap smartphones for low-end, is the top share It is jumping out. Samsung, which has the second largest share, is falling into an “innovation dilemma”, and imitating Xiaomi involves enormous costs such as layoffs, so it seems that switching to the low end is not realistic. Furthermore, as a first-mover advantage, customers who have introduced SUNBLAZE Phone once will continue to use it afterwards, and the incentive to buy another model will be reduced. Also, once the ecosystem of apps is built, other companies will not be able to manage them immediately.
Traction performance for three months | 430 units already received
They have 10 orders each in India, Rwanda and Myanmar, 300 in the World Bank and 100 in Brazil. In addition, it seems that PoC (proof of concept) is under way in Japan, Indonesia, the Philippines, Kenya, and others. The numbers and geography also show the potential of SUNBLAZE. The following introduces case studies in each country.
A Japanese consulting company supports the business of selling vegetables grown in clean water to wealthy Indians. Water quality is measured by farmers in remote areas, but you can get information online using the app on SUNBLAZE.
Local agritech venture companies are developing apps that teach farmers how to farm. However, many of the user farmers did not own smartphones, so SUNBLAZE Phone is being used.
In Myanmar and Indonesia
SUNBLAZE Phone is offered to local B2B marketplace dealers who have not managed digitally using smartphones.
In World Bank
In the past, poverty surveys were conducted on paper, but in that case, it took three to four years, and the validity of the survey itself was reduced. In the future, investigators will conduct field surveys using SUNBLAZE Phone, upload survey results to the cloud, automatically analyze them by machine learning, and generate reports. In this way, SUNBLAZE’s contribution will extend to the improvement of global poverty.
In developed markets
It seems that companies in developed countries are starting to use it, for example, to manage the work of salespeople with smartphones and use it to improve performance.
Approaching Agritech and Fintech in Brazil | Validated potential demand for SUNBLAZE
Immediately before the forum, we visited Piracicaba, a suburb of Sao Paulo, one of the major hubs of Agritech in Brazil, and exchanged opinions with stakeholders of leading agritech companies. Many smartphones used by farmers in large-scale farms have been used or stolen for a long period of time, and often cause breakdowns. The response to SUNBLAZE, which strived to solve these user issues from the front, was good, and the voice of “I would like to introduce a test” was promptly rising.
In addition, they met with ABFintech, the Brazilian fintech supervising organization, and microcredit startups, and many of the low-income people have been using smartphones for four to five years, and are reported to see malfunctions. However, there is a financial hurdle to buying a new one. From the social impact measurement, we confirmed that there is potential demand for SUNBLAZE. We have already delivered 100 units to Brazil, so we can’t wait for full-scale entry through testing.
Visited AgTechGarage in Piracicaba, Sao Paulo before the forum
Scale plans in each segment | Business opportunities even in toC markets
They draw a three-phase scale plan as shown in the table below. As a flow up to the introduction, first, one device is provided to the corporation as a sample. Next, after confirming the operation of the application and SIM, it seems that it will be introduced in the flow of receiving orders for +10 units.
|Category||Phase 1||Phase 2||Phase 3|
|toB||Agriculture, construction, retail, medical, telecom etc.||Shipping, transportation, white collar||Goverment|
|toC||Lower middle/Lower income||Middle income||Higher income|
|Spec||Low end||Middle end||High end|
|Geography||BRIC etc.||US, EU, Japan||Africa, Myammer etc.|
“If the ecosystem of the app store is established, there will be opportunities in the consumer market,” says Tokiwa. For example, if HUAWEI’s smartphone has a two-year operating life of US $ 300, while SUNBLAZE Phone has a three-year operating life of half US $ 150 (and excellent security features), SUNBLAZE is cleary superior in its economical reason.
A new story for smartphones | From entertainment to empowerment
In the past, smartphones have been sold with a focus on entertainment, such as “You can enjoy Instagram and Youtube.” However, Mr. Tokiwa believes that in the future, the story will turn into an empowerment-oriented story such as “If you buy this smartphone, you can get work and you can borrow money.” In this way, it is hoped that SUNBLAZE will become a life-changing primate even without the users themselves having high digital literacy.
Thank you very much for insightful presentation!