Company that matches Japanese business owners with successors using AI triples its opening price

A young Japanese entrepreneur has achieved success by using AI to address issues in an aging society.

M&A Research Institute, a company that employs AI to match Japanese business owners with successors, has seen its stock price more than triple since its debut on the Tokyo Stock Exchange in June 2022.

This year alone, the stock has experienced a 47 percent increase.

According to the Bloomberg Billionaires Index, 32-year-old Shunsaku Sagami, who owns a 72 percent stake in the company, is now worth $950 million as of May 16.

Founded in 2018, M&A Research Institute aims to assist aging owners of small and medium-sized enterprises who face closure due to a lack of successors. In April, the company revealed that 620,000 profitable enterprises in Japan are at risk of collapse due to this shortage.

Sagami explained in a recent interview that he was inspired to establish the company by his grandfather, who had to shut down his real estate office in the 1980s due to the absence of a successor. Witnessing his grandfather’s real estate license being taken down and discarded left a lasting impression on Sagami.

M&A Research Institute, which employs around 160 workers, focuses on firms with annual revenues of up to 500 million Japanese yen (approximately $3.7 million).

The company claims to be able to complete M&A agreements in 49 days to six months using AI and proprietary data, whereas such transactions often take over a year with traditional methods.

M&A Research Institute does not charge any fees until a transaction is successfully completed, after which it levies fees of up to 5 percent.

In contrast, other M&A consultants charge retainer fees in the millions of yen, even if the deal falls through.

The company reported that it concluded 62 agreements in the six months leading up to March 2023, more than double the number of deals closed during the same period the previous year.

Sagami’s previous ventures include selling Alpaca, a women’s fashion and beauty brand he started, to a Japanese public relations firm in 2017.

Having experienced the slow pace of deal-making, Sagami developed an AI algorithm to streamline the process, leading to the creation of M&A Research Institute.

On Tuesday, M&A Research Institute’s stock closed at 9,270 Japanese yen, representing a 0.4 percent decrease.