SmartRound Securities, a Tokyo firm that only recently won approval to broker trades in unlisted Japanese shares, is now extending that business into the United States and the United Kingdom, opening a channel for overseas investors to buy into private Japanese companies long before any of them go public. The move builds directly on the firm's domestic license, expanding a market that barely existed in an organized form inside Japan just months ago into an international one.
Japan's Financial Services Agency registered SmartRound as a specialized broker for secondary trading of unlisted shares back in August, classifying the unit as a Type I Financial Instruments Business, the same regulatory category that governs conventional stock brokerages. Chief executive Takuya Kano has described the company's mission as building a transparent, efficient secondary market for unlisted shares, aiming to bridge the gap between Japan's startup ecosystem and the broader pool of capital that has historically had little organized way to reach it before a company's public debut.
Solving a problem that trapped both founders and early backers
Before this kind of platform existed, anyone holding shares in a private Japanese company, whether a founder, an early employee, or one of the venture investors who backed it in its earliest rounds, had essentially two ways to cash out: wait for an eventual public listing, or hope another company came along to acquire the business outright. Both paths can take years to materialize, if they happen at all, leaving a lot of paper wealth stuck in place with no practical way to convert it into cash in the meantime.
A functioning secondary market changes that calculus considerably. Employees who joined a startup early and built up meaningful equity can sell a portion of their stake without needing to wait for a listing that may be years away, while early investors gain a way to realize returns on a schedule that suits their own fund cycles rather than the unpredictable timeline of another company's path to an IPO.
Why going international matters
Extending the brokerage into the US and UK plugs Japan's private companies into two of the deepest pools of institutional capital in the world, markets full of investors accustomed to trading in private company stakes and comfortable with the due diligence that kind of investing requires. For a promising Japanese startup, access to that pool of buyers could mean a meaningfully larger and more liquid market for its shares than domestic investors alone could support.
The expansion also reflects a broader shift already underway in how Japan treats companies on the path to going public. Regulators have been actively encouraging the development of a proper unlisted share market, a signal that policymakers see real value in letting companies grow at their own pace, with investors able to trade shares along the way, rather than pushing every promising startup toward an initial public offering before it may be genuinely ready for the scrutiny and reporting demands that come with a public listing.
An early step in a market still finding its shape
SmartRound's move into two major foreign markets so soon after winning its domestic license suggests the company sees international demand as central to making its business model work, rather than treating overseas expansion as a distant, secondary ambition. Whether volume in Japanese unlisted shares grows quickly enough to justify that early bet will likely become clearer over the coming year, as more of Japan's private companies and their shareholders discover a market that, until recently, essentially did not exist for them at all.
