【Investors' Interview vol.1】SBI Investment makes its first investment in an AR company - why did they choose Pretia Technologies?
Mr. Hashizume, SBI Investment Co., Ltd.
Investment Department Manager. Graduated from Keio University in 2016 and joined SMBC Nikko Securities, then he joined SBI Investment. His three portfolio companies achieved IPO and M&A. He believes in the potential of Metaverse and Web3 and is expanding his portfolio.
ーWhat was your first encounter with Pretia?
Hashizume: I was struck by the teaser video of Pretia's beta pre-registration release. The image I saw gave me a sense of the company's future potential, and I was curious about what Pretia was doing now, so I contacted them around April of 2021.
I originally loved anime and watched Sword Art Online, so I had high hopes for XR even before the term "Metaverse" became popular. Many of the other startups also said that they started their XR business because of Ghost in the Shell and other things, so I thought we were looking in the same direction and wanted to ride the wave.
ーWhat was your impression of CEO Ushio when you first met him?
Hashizume: I was impressed by his calmness, seriousness, and politeness, as well as his ability to talk logically about a lot of information while also having a sense of humor.
Ushio: To be honest, I had a hard impression of SBI at first. In the first place, I had a hard image of financial companies as a whole, and I also wondered if they could understand the AR business since their main business is finance. I also wondered if I could understand the AR business if my main business was finance. However, when I first spoke with Mr. Hashizume, I strongly felt that he was excited and that I could understand what he was saying. After that, he introduced me to his business partners, and I was very impressed by his willingness to not just talk to me but to actually take action.
In fact, looking at the history of your company, SBI is a company that is overflowing with a venture mindset, which fits our style of "building businesses together with investors to raise the value of the company itself”. We are very grateful that SBI has introduced us to so many companies.
Hashizume: That is one of our strengths, and we hope you will take advantage of it. Also, we did not have a portfolio of AR themes until now, and the response of other companies was important to persuade senior members in our company, so we were able to introduce various companies early on to Pretia.
ーI think it must have been quite difficult for someone from a different industry to become familiar with AR.
Hashizume: First, I watched Sword Art Online and COIL A CIRCLE OF CHILDREN. I also studied AR by referring to a media “MoguraVR” and actually bought Meta Quest2 to try it out.
ーCould you tell the main reason why you decided to invest in Pretia?
Hashizume: First, I was attracted by the diversity of the members, not to mention Mr. Ushio, and second, I wanted to bet on the possibilities of AR.
Regarding the members, Mr. Ushio was a student entrepreneur who used to work as a government consultant, so I felt that his ability to negotiate and communicate with the government and local governments, as well as his team management and promotion skills, were rare. I believe that AR itself will be involved with local governments in the future, so I really appreciated his ability to negotiate with them. In addition, I found it fascinating that more than 60% of the members are foreign nationals. I was impressed that Mr. Ushio, who is a "pure Japanese", was able to achieve this. I think it will be an advantage for Pretia in the future that he actually goes overseas for recruitment, has established a referral system, and is ready for globalization from the very beginning.
To elaborate on the second point, I have a sense that "Version 1" has now emerged in terms of hardware, and what had previously been discussed only among some engineers has become known to those who are not so familiar with it, and I felt the spark of gradual industrialization.
ーThe keyword "global" was mentioned. What do you think of the possibilities and images of global development of AR?
Hashizume: I think there is a great potential to take on the global challenge because the possibilities of AR are emerging simultaneously around the world, regardless of language, etc. Famous companies such as Niantic, Snapchat, and GAFA are also developing technologies, but they are all running side by side. In this context, I have a desire to create something as large as the “Pretia Economic Circle”, if only by chance. The members and environment that will make this possible have been in place from the beginning, so I would like Pretia to aim high.
Ushio: I don’t mean to brag, but I think we have the best group of members in the AR industry and among startups in Japan, regardless of industry, so we will do our best to hit a home run.
ーWhat do you think about the development of AR in the next few years?
Hashizume: Personally, I think the time will come when things will settle down; there was no hardware introduction at WWDC2022*, and I think it will be several years before the device everyone envisions will be released. On the other hand, I think it is important for many people to have an imagination of what they can do, and I think there will be an event in the next year or two where that can be stirred up.
What I would like Pretia to work on there is to carefully create and grow both the development and user communities. Even when the excitement dies down, if you don't continue to promote AR without wavering, I think the movement that you have created will wither away.
Ushio: In the extreme, I think that if we can increase the enthusiasm of AR developers by supporting them, without regard to whether they use Pretia or not, then Pretia will be chosen by many people and we can grow together, so I would like to focus on the community first.
ーWhat do you think is necessary for the development of AR as an industry?
Hashizume: I think we need to create a lot of use cases. I think that the royal road to success is to repeat the PDCA cycle and expand horizontally on those that are successful.
I also think it is good to create use cases for business companies that are light on their feet, and then expand horizontally in that industry. In the financial industry, there are many possibilities, such as using AR to assess automobiles and mortgages, and in the non-financial industry, for example, the use of AR content as NFT.
Ushio: In terms of our strategy, we are always focusing on the top four AR markets in order of size: games, entertainment, manufacturing, and retail. There are many clear use cases for these four, and I have the impression that they are increasing. On the other hand, we have recently been approached by other industries for larger projects. What I sense is that many of the inquiries are grounded, without fantasies or excessive expectations about AR. We are taking this as a positive sign, and we are sincerely communicating the specific business value and cost-cutting potential of AR.
ーWhat do you think is necessary for the future growth of Pretia?
Hashizume: First of all, I think we need to continue hiring excellent members. One of Mr. Ushio's strengths is his ability to promote projects with local governments and large corporations, but I think it is necessary to build an organization so that it does not become an individualized organization that relies solely on Mr. Ushio. I would also like you to create killer content. And to do so, we need to produce a large number of them.
In addition, as I mentioned earlier, I would like you to work on community building. I would like you to expand the grassroots community by holding hackathons, etc., and build a user base from the bottom up.
Ushio: There is certainly a shortage of frontline members. As a countermeasure, we are now conducting training for all business members and passing on our methods to them. We will continue to hire people who are capable, but I hope that we can grow as an organization by providing training to those who have potential, rather than seeking a level of 100 points from the start.
Hashizume: From a long-term perspective, I would like you to try in the field of education. If more people are exposed to AR from a young age, I believe it will become a culture, not just a passing fad. The possibility of killer contents being born from them will also increase. And in this respect, I think this is a place where your experience as an administrative consultant can be put to good use.
Ushio: In addition, I think we can also make use of the game development skills that Pretia has. Learning skills through gamification is one of XR's areas of expertise, and our in-house members are good at thinking about such things using their technical skills, planning ability, and responsiveness, so I think this is one of the areas where we can create good things in the future.
ーLastly, what are your expectations for Pretia?
Hashizume: This is the first time we have invested in an AR venture, and I believe that the Metaverse is a new paradigm for both myself and the group, so I really hope that it will become a leading company in Japan. In particular, since Pretia is the only company that has created a development platform and community, I hope that Pretia will nurture this unique community and, if possible, expand it to Asia, North America, and so on.
Ushio: We will continue to make efforts from various aspects to create a society where everyone can use AR as a matter of course. Thank you very much for your cooperation.
*World Wide Developer Conference: Apple's annual developer conference, featuring the latest information from Apple, in-depth technical sessions for developers, and keynote speeches.