Top Executive Interviews "SOU"

　It is no secret that the internet advertising market has been steadily expanding in recent years. According to “Japan Advertising Expenditures 2023”, released by Dentsu, total advertising expenditure increased 103.0% from the previous year to a record JPY 7.32 trillion internet advertising expenditures amounted to JPY 3.33 trillion (107.8% of the previous year's total), accounting for all of 45.5% of total advertising expenditures. Since spending on internet advertising overtook the Big Four of mass communication media (television, newspaper, magazines, and radio) in 2021, we have plunged headfirst into the era of the online space being the central battlefield of the advertising world.

　AnyMind Group Inc., which was listed on the Growth Market of the Tokyo Stock Exchange (TSE) in March 2023, is a company that started in this still- growing domain. The company's rapid progress began in 2016, when it launched its business in Singapore, followed by the establishment of local subsidiaries in Thailand, Indonesia, Vietnam, and Taiwan in the same year. Since then, the company has continued to expand its business domain by establishing subsidiaries in Cambodia, Japan, China, Hong Kong, and other Asian and Middle Eastern markets one after another.

　Their business now encompasses end-to-end support of enterprises through the utilization of technology. The company's current scope of operation is divided into two main areas, one of which being the “Brand Commerce Business,” where they provide a one-stop shop providing in-house platforms and operations for business strategy, production and logistics management, marketing, customer service and management in the EC and D2C domains.

　The other is the “Partner Growth Business,” which provides in-house platform for publishers and creators that operate web media or apps to help them monetize and grow their brands. For example, for a post by a mega- or macro- influencer based in Thailand, the company can find a client from whom they could expect high performance from that post and show an advertisement on that site. As another example, they can help a Singaporean web media company automate the placement of programmatic advertisements, improve UI/UX and drive user engagement using cutting-edge marketing technology, thereby enabling the company to efficiently generate revenue, reduce manpower, and achieve growth for the media itself.

　This business is made possible by the AnyMind Group's advanced technologies and its local networks across Asia and the Middle East, which has now expanded to 15 countries and regions. In the second quarter of 2024, the company continued its steady growth, posting sales revenue of JPY 22.5 billion (up 57.6% YoY) and gross profit of JPY 8.3 million (up 53.5% YoY). Kosuke Sogo, who has built up this mega-venture over the eight years since its founding, looks back on the beginning of the business.

“Before we started our business in Singapore, I carefully researched what business areas would become central to the online world. At that time, I saw the rise of social networking services around the world and felt that an era would come when individuals such as influencers would become media. On the other hand, I had been fascinated by the possibilities of ad tech right after I entered the workforce, but there was no optimal mechanism at the time to connect influencers, brands, and consumers through advertising. So, I thought, in that case, if we could create a platform that matched these advertisements with highly compatible partners, we could start a revolution. From the beginning, I had an image of developing a variety of products and cross-selling services throughout Asia. If I was going to start a business, I wanted to do something big, to have an impact on society. So from that perspective, when I look at our progress I feel reminded that we are going in the right direction.”

　Because his grandfathers on both his mother’s and his father’s side were entrepreneurs, Sogo aspired to be an entrepreneur from an early age. As a high school student, Sogo developed a strong interest in the internet industry as cutting-edge entrepreneurs the like of Softbank's Masayoshi Son and Livedoor's Takafumi Horie emerged from the world of information and telecommunication.

“After entering university, I interned at an internet-related venture company. I was blessed with the opportunity to work very closely with the CEO, and I was able to learn about the building phase for an online business. In order to gain further experience, out of university I joined another internet-related company. There, I immersed myself in the up-and-coming world of ad-tech and became infatuated with how fascinating and full-of-potential it was. At the time, Google AdSense (a system in which site administrators are credited according to the number of times their ads are clicked) was finally being utilized in Japan, and I felt a strong synergy with the advertising-based internet business model.”

　After graduating from university, Sogo joined an ad-tech company and worked diligently in the sales department to which he was assigned. Soon after, he accomplished the feat of breaking the company's record for the highest single-month individual gross profit margin in the company's history. Naturally, the company took notice of him, and in his second year, he was selected for the task of establishing a subsidiary in Vietnam, a job that would connect him to where he is today.

“When I was backpacking around Asia as a student, I had the impression that there were a tremendous number of young people. In fact, the average age in Indonesia is 29. After experiencing firsthand the vitality of the local population, I was convinced that the amount of time spent on the Internet in these countries would increase dramatically. Then when I was doing sales in Asia as a working adult, when I would talk about how the time spent in contact with offline media is decreasing rapidly and how the online advertising business is growing tremendously in the U.S. and Japan, many people understood.”

　Eventually, by his mid-20s, he had established local subsidiaries in six Asian countries and assumed the role of CEO, making decisions and managing the business operations. Finally, the concrete path to starting his own business had come together.

“Since joining the company I had been privileged with many invaluable experiences, but in the process of increasing the number of sales offices, my desire to develop products of my own grew. This path naturally led me toward starting my own business.”

　In 2016, Sogo founded AdAsia Holdings (renamed AnyMind Group in 2018 due to the company’s intention to expand out of the advertising industry) in Singapore. While starting to provide digital tools for advertisers, influencer marketing platforms, and other services, he established local subsidiaries in five Asian countries, including Singapore, within the same year.

“As we were providing products for major companies, we became able to identify what they would need next. In this way, we constantly gained input from the market and gradually increased the number of products we offered. Therefore, it was inevitable that we would offer products to support e-commerce, and we began developing and offering products to support the logistics of enterprises because there was a need for them. We had been thinking about increasing the number of products based on market needs and increasing the number of countries in which we operate since before we started the company, and we were able to do exactly that.”

　In just over two years since its founding, AnyMind Group had grown into a group with local subsidiaries in more than 10 Asian countries. Its growth had been accelerated by their ability to conduct sales to advertisers and influencer research on a large scale while collaborating cross-border between teams in each country.

“Since the company was founded, we have continued to develop products with an eye on the global market, so our products are based on the same worldwide model. Therefore, it is easy to develop products simultaneously in each country, and management and updates are speedy. Currently, we have four bases for development in Tokyo, Thailand, Vietnam, and India, and engineers can work at the base of their choice. Also, the fact that our products are used all over the world is attractive to engineers, so we attract excellent engineers not only from Asia but also from Europe and other continents.”

　Another factor behind AnyMind Group's rapid growth has been its strategic and aggressive M&A pursuits. Even before going public, the company acquired seven companies to fill in the missing pieces as a group and build a strong operational base in the vast field of Asia.

“All of the world's major corporations, such as Google, Meta, Alibaba, and Tencent, make effective use of M&A, don't they? So I thought, in order to build a group company that could have a societal impact, naturally I too had to make good use of M&A. What I focused on was how well founders would maintain ownership after the acquisition. In other words, we did not just buy the parts we wanted and ask the founder to leave the company, but did our best to have them remain as the heads of our local subsidiaries or business units. Our basic approach is to provide stock options and other incentives to ensure the founders’ motivation and then leave management to them.”

“In the end, it is a question of price, or rather, how to close the gap between the valuations desired by both parties, and to achieve that it is important to firmly explain the benefits to both parties after the M&A using numbers and logic, rather than vague persuasions such as “creating synergy”. M&A will continue to be an important growth strategy for our company, and if possible, we would like to accelerate it.”

　In acquisitions, the go-to phrase is “growing market”. The key is to motivate stakeholders by emphasizing that the market in which AnyMind Group does business will continue to expand in the future, explains Sogo.

“It’s the same thing that I often tell my employees, about how I want them to be excited about the future because we operate in a growing market. The mindset of believing that the future is bright is the most important growth engine for a company.”

　Going public was on the mind from the point of incorporation for Sogo. We asked him again about the meaning and effect of going public.

“We were able to raise the necessary funds even when we were unlisted, but considering our future growth as a company, going public was in our sights as an inevitable milestone from the time of our founding. In fact, after going public, we feel that our business partners have viewed our business in Southeast Asia very positively. It has made it easier for us to form partnerships with large companies in other countries, and in terms of recruitment, we have been able to attract more talented people than ever before.”

　As the company is expanding its business widely in Asia, we asked if they had considered listing on an overseas exchange.

“With our business expanding globally, markets other than TSE were on the table for us, but even at the international level TSE has a very high quality of investors, both institutional and individual, and being Japanese myself, I thought that TSE would have more shareholders who would support us. Since we are developing our offices and businesses mainly in Asia, we decided that TSE would be a good fit for our company. Although we had heard that listing examinations are strict, we thought that we would be able to grow further in terms of governance and compliance through that process.”

　We asked why AnyMind Group, which was a foreign company, conducted a corporate inversion and listed on TSE as a Japanese company.

“The reason for this was because we considered the liquidity of the stock after listing to be of great importance. It would have been better if we could have just listed the stock as a foreign company but considering the trading volume of foreign stocks listed on TSE, we felt that listing the stock as a foreign company would have carried a high risk.”

　When asked about how his mentality has changed as the head of a publicly traded corporate group, this is how Sogo answered.

“I don't think anything has changed fundamentally, but I rather enjoy the reality of being evaluated by the market every day. On the other hand, I have put more thought into careful communication in terms of information disclosure. We do business in 15 Asian countries and have multiple businesses, so from the outside we are a highly complex corporate group. Therefore, no matter how good our figures are, we must disclose information with the highest possible resolution. We need to explain not only the results, but also the reasons why this growth will continue, the potential of markets throughout Asia, and the geopolitical risks in each country.”

“We also conduct finely detailed communication with individual investors by providing them with proper answers to the questions they raise each quarter. In any case, I think it is very important to provide logical explanations and convey to our stakeholders the fact that I truly believe in the growth of AnyMind Group.”

　Sogo has achieved an initial public offering on the Growth Market within seven years of founding his company. Based on his many accomplishments, including drastic M&A and speedy global expansion, we asked him for a message to give to young entrepreneurs who are aiming to start growth companies.

　I believe once again that going public is the easiest time to leverage a company's growth. Therefore, in order to take advantage of this great opportunity, it is important to have a detailed story and a clear vision of how the company will grow after going public. That, and a certain level of preparedness. Once you go public, you may be compared to large companies listed on NASDAQ, and you need to ask yourself if you really have what it takes to beat those competitors.

“I believe that the number of influencers will continue to increase around the world. However, the battle between platforms will intensify, so in addition to the qualities and influence of individual influencers, we will be required to determine which social networking sites will become dominant and which platforms will be strong in which countries.”

“The analysis of platforms and the efficient monetization of influencers and brands all comes from the utilization of the data we have collected. In short, the key points for our growth will be how well we can utilize AI and data, how well we can horizontally expand the business areas we have established, and how well we can utilize them in new business areas.”

　Whenever asked about trends in the industry in which he does business and the company's growth, Sogo responds promptly and clearly. We wonder how stressful every day must be, constantly gathering information, organizing his thoughts, and making numerous decisions. We asked him about his daily life, and the secret to keeping his mind and body in good shape.

“I was touring around Hangzhou, Shanghai, and Singapore since last week and got home the day before yesterday, then I am flying back to Bangkok this evening. That’s the life I live, so even if I am not mentally fatigued, there are always physical challenges. So, I guess my hobby or routine is exercise. (Laughs)
I also recently learned to how to use the sauna to sharpen up, so I am in very good shape right now”.

　When asked what he wants to have or do outside of work, Sogo responds immediately.

“I wanted to improve the quality of my sleep, so I recently bought a travel pillow. And, yeah, I want an Anywhere Door*.” (Laughs)

*In a Japan's popular anime, Anywhere Door is a future gadget that allows instantaneous transportation to one's desired place.

　His words convey a sense of foresight, rationality, and creativity. In the eyes of Sogo, who says, “A problem = Potential to grow,” every situation is seen as a source of growth. How much growth will AnyMind Group achieve in the vast Asian market? We cannot wait to see where the road ahead takes them.