Japanese entrepreneur Yusuke Horie is no foodie. The 27-year-old says he had absolutely no interest in cooking before 2016 when the company he founded, Dely, launched video recipe app Kurashiru. It has since been downloaded 18 million times and is one of Japan’s top-three recipe or cooking apps by daily downloads. Horie started watching his own videos to make his own meals and even splurged on a $300 Vermicular cast-iron enamel pot—a princely sum for a devotee of instant ramen noodles.
Now Horie, a member of Forbes Asia’s inaugural 30 Under 30 in 2017 is looking to take dely abroad and make Kurashiru a gateway between the food industry and consumers. The company recently sold a nearly 46% stake in dely to Yahoo Japan, controlled by SoftBank Group, for ¥9.3 billion ($86 million). That investment upped the amount Horie has raised in the past three years to ¥17 billion. (The company declined to disclose his current stake.) Horie still hopes Dely can someday launch an IPO as he pursues bigger dreams. His target within the next four years is for dely to have 50 million users in Japan, up from 35 million now—a figure that includes users of the women’s fashion and advice site and app Trill acquired in March, and 10 million elsewhere in Asia.
Horie resolved to become an entrepreneur while in high school. He worked as a volunteer following the 2011 Tohoku earthquake and tsunami, but wanted to do more. Noting that Softbank’s Masayoshi Son pledged ¥10 billion to help the victims and that Rakuten CEO Hiroshi Mikitani used his own wealth to fund cancer research after losing his father to the disease, Horie decided to start a company that could help and shape society. “I didn’t want to regret later in life, if something like the earthquake happened again, that I would be helpless,” he says.
Horie started Dely in 2014 while studying at Japan’s elite Keio University following a failed attempt in his sophomore year to start a meal delivery service. (He later dropped out of Keio.) Dely started out as a lifestyle information site before settling on recipe videos. Within months after its launch, Kurashiru had been visited 100 million times.
Kurashiru now delivers roughly 50 new videos of a minute or less every day, each showcasing a home-style dish that takes between ten to 20 minutes to make and uses readily available ingredients. Its millions of users for recipe videos put it on top of the market, edging out its biggest competitor Cookpad. Horie believed that, with just ¥10 billion in capital, he could use a well-funded advertising and marketing campaign to grab eyeballs from Tokyo-listed Cookpad, which had a nearly two-decade head start for online recipes.
Despite having a roughly ¥350 billion market capitalization, Horie says, Cookpad was doing almost no advertising. “That indicated to me that its policy was not spending money on advertising to get users,” he says. “Companies that have such rigid policies can easily fall into an innovation dilemma, like not being able to deal with a new wave of competition.” Dely also had the advantage of timing: it launched its video app just as Japan introduced faster 4G cellular service, which made watching video on mobile devices much easier.
The jury is still out: while dely has topped Cookpad’s video traffic, Cookpad has nearly tripled ad spending since 2018, says the company, and started its own video service and app. Cookpad’s shares have fallen roughly 90% in the past four years, as revenue has dropped almost 30% over the past two years and profit plunged by nearly 90% last year. Cookpad didn’t respond to a request for comment.
In addition to its free videos, Kurashiru now offers a ¥480 monthly subscription that provides more space to save recipes and displays both recipe rankings and the calories in each dish. Dely has also inked tie-ins with food makers to promote their products, and is testing sales of ready-to-cook frozen meal kits based on the site’s videos.
The most promising avenue for new growth, Horie says, is to compete in the market for supermarkets and grocery deliveries now dominated by Japan’s member-owned consumer cooperatives, or seikyo. In 2018, these coops had nearly $29 billion in sales, according to the organization.
“We could combine the internet with real world stores, delivering to our customers from our stores and having customers pick up from them,” says Horie. “We’re considering how we can expand the brand beyond just the internet.”
Dely is busy at the moment focusing on integrating its recent acquisitions, including Trill. But Horie’s hope is that it can someday venture abroad. His idea is to create JVs with foreign partners, with dely providing its 30,000 videos for use in its partner’s market and the partner providing videos dely can use in Japan. (The firm isn’t pursuing any specific talks, including through Yahoo Japan, this year because it’s focusing on integrating recent acquisitions, he notes.)
Going abroad will present difficulties, Horie says, particularly bridging different national tastes, cultural traditions and religious restrictions. “If we had an Indian partner, for example, we could attain the rights to their curry videos,” he says. “We don’t know about eating habits in India, so that’s why it would be good to have a local CEO who understands that overseas culture.” – James Simms (Forbes Asia)