AI helped this Japanese CEO's firm soar nearly 50%. Know how

A Japanese millennial who uses AI to help solve a problem in an ageing society has made it big.

M&A Research Institute, a company that matches Japanese business owners with successors using AI, has more than tripled its opening price since its debut on the Tokyo Stock Exchange in June 2022.

This year alone, the stock has risen 47 per cent.

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According to the Bloomberg Billionaires Index, Shunsaku Sagami, a 32-year-old entrepreneur with a 72 per centstake in the company, is worth $950 million as of May 16.

M&A Research Institute, founded in 2018, aims to assist ageing owners of small and medium-sized enterprises who are forced to close their doors because no one is available to take over. In April, the business stated that 620,000 profitable enterprises in Japan face collapse owing to a shortage of successors.

In a recent interview, Sagami told Bloomberg that he was inspired to launch this firm by his grandpa, who was forced to close his real estate office in the 1980s after he retired due to a lack of a successor, reported the Business Insider.

"In his office, there was a license for real estate agents framed up on the wall," Sagami told Bloomberg. "Seeing that taken down and thrown away was sad," he added.

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

According to its website, the business can conclude M&A agreements in 49 days to six months using AI and proprietary data. As perthe Tokyo-based company, these transactions often take more than a year from request to completion.

Until a transaction is completed, M&A Research Institute does not charge any fees. It charges fees of up to 5 per centfor a successful closing.

Other M&A consultants charge retainer fees in the tens of millions of yen — even if the deal never closes, according to M&A Research Institute's website.

The company claimed it concluded 62 agreements in the six months to March 2023, more than double the 26 it closed in the same time last year.

The M&A brokerage is not Sagami's first enterprise. According to Bloomberg, he graduated from Kobe University with degrees in biology and agriculture and worked as a designer, software developer, and marketing officer before striking out on his own.

In 2017, he sold Alpaca, a women's fashion and beauty brand he started, to a Japanese public relations firm.

As reported by Bloomberg, Sagami found the deal process sluggish, so he built up a system with an AI algorithm to ease the flow of the company.

On Tuesday, M&A Research Institute's stock closed0.4 per centlower at 9,270 Japanese yen.

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