Japanese human resources platform operator SmartHR has delayed its plans for an initial public offering to next year at the earliest as investors viewed the company¡¯s targeted valuation as too high, according to people familiar with the matter.
The software-as-a-service provider had aimed for a valuation of about $1 billion and is working with banks including Daiwa Securities Group, Goldman Sachs Group and Morgan Stanley, sources have said. They said the details such as timing and valuation could change due to investors¡¯ concerns over the disruptive impacts of the artificial intelligence boom on the software-as-a-service sector.
SmartHR did not immediately respond to a request for comment.
The human resources service provider is among the few current Japanese unicorns, defined as unlisted startups valued at over $1 billion, and had earlier mulled a share listing later this year. It had achieved a valuation of ?170 billion ($1 billion) in a financing round in 2021, before KKR and Teachers¡¯ Venture Growth led a $140 million fundraising round in 2024. New York-based private equity firm General Atlantic acquired shares in SmartHR from early-stage investor Coral Capital last year.
Japan¡¯s IPO market is slowing down as companies and shareholders raised ?146 billion from first-time offerings in the first half this year, the lowest since 2022, data shows.
The number of small-sized IPOs in Japan last year fell to the lowest in more than a decade, as the Tokyo Stock Exchange¡¯s reform push prompted private companies to reconsider quick listings.
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