[BuddyCloud] Expanding into Southeast Asian Markets with a Distribution Platform Hooked on Pet Health Management

From Keio Business School to Southeast Asia: The Trajectory of BuddyCloud Tackling Pet Market DX

Hello, everyone. My name is Shun Fujii, CEO of BuddyCloud Co., Ltd. Thank you for having me today. Let me start with a brief self-introduction.

After graduating from university, I joined Dentsu, where I was responsible for offline media and other advertising projects. Later, I gained experience in both domestic and international marketing as a Sales Manager at Animind Japan, a pet startup. I then supported the Japanese market entry of DoorDash, a major food delivery service, at iREP. On November 29, 2023, while studying at Keio Business School, I founded BuddyCloud, which is now in its third fiscal year.

Currently, we have been selected for JETRO's "J-Star" program and various subsidies, and this year we secured a Global South subsidy specifically targeted for Southeast Asia, focusing on Malaysia to drive our business forward.

Overcoming the Bottleneck of Asian Markets: Breaking Down the "Barriers of Pet Product Import/Export" via Trading Functions

The challenge we aim to address is the distribution of pet products within the Asian region. Currently, compared to Western markets, the variety of products available in Japan and Southeast Asian markets is highly limited. This is caused by import/export regulatory barriers and local market complexities. Since there is no major specialized trading company in the pet industry, it is extremely difficult for manufacturers to overcome these import/export hurdles individually.

To solve this, we gather outstanding products that are not yet released in Japan or Southeast Asia by category, and distribute them utilizing our in-house logistics and trading functions. Starting this April, we will officially launch our operations in Malaysia. Furthermore, we do not limit ourselves to being just a select shop or an EC platform; we also focus on developing our own products leveraging market data.

World's First Home Test for Feline Chronic Kidney Disease: The Impact of the "AI Urine Test Kit" Providing Results in 1 Minute

Among the products we are developing in-house, we are focusing heavily on our "AI Urine Test Kit." Owners simply dip a litmus test strip into their pet's urine at home, take a photo with their smartphone camera, and upload it to the app. The AI then determines the pet's health status across 10 parameters in less than a minute. This system helps prevent pets from passing away unnoticed due to delayed veterinary visits and promotes the early detection of diseases at the pre-symptomatic stage.

Additionally, we are currently working with Professor Daniel of Keio University to develop a home test kit for the early detection of chronic kidney disease in cats. In fact, it is said that one in three cats develops chronic kidney disease, and this will be the world's first home test kit for this condition. We plan to release this kit in May. We are also building a hardware integration where the AI urine test kit is linked to a smart litter box, automatically sending health analysis results to the owner the moment the cat urinates.

Driven by the Legalization of Telemedicine and Online Drug Sales: Building a Data Platform from Malaysia

The reason we are focusing on the Southeast Asian market rather than Japan comes down to the synergy between regulations and our business model. In Japan, providing specific recommendations to owners based on urine test results (e.g., suggesting a particular pet food) is highly likely to be deemed a "diagnostic act" under the Veterinary License Act, placing constraints on business expansion. On the other hand, in many Southeast Asian countries, online veterinary consultation and the online sale of prescription drugs and therapeutic diets are legally permitted, allowing for much faster business development.

Among these countries, we chose Malaysia as our initial base because there are no foreign investment restrictions and its logistics convenience as a regional hub port for Southeast Asia is exceptionally high. Furthermore, since Malaysia is a Muslim-majority country, it has a strong culture of keeping cats rather than dogs, which aligns perfectly with our approach centered on the feline kidney disease test kit. We are currently collaborating with the Malaysian Veterinary Medical Association and plan to offer our app and telemedicine functions as an infrastructure for local animal healthcare.

Raising 1.6 Billion Yen in Seed Round 2: Targeting a 1.6 Trillion Yen Market Hooked on Partnerships with 18 Hospitals

Our core strength lies in our data-driven business model, which utilizes this urine test kit as a hook for low-cost customer acquisition (low CAC) to accumulate health data (biological data, purchasing data, and urine image data). Based on this data, we aim to develop proprietary pet foods and partner with pet insurance companies for new service rollouts. This data platform has already attracted significant interest from major local companies.

Furthermore, by combining our exclusive sales rights for Western pet brands with our in-house test kits, we engage in "barter trade." This provides manufacturers with channel expansion benefits while allowing us to procure products efficiently and cost-effectively.

In terms of traction, we have already partnered with 18 veterinary hospitals in Malaysia. Additionally, starting in February, we collaborated with a local retailer to set up a BuddyCloud special booth for one month, launching offline branding. We estimate the target Southeast Asian pet market size to be 1.6 trillion yen, representing massive growth potential.

We currently have a team of 10 specialists, and to fund our future expansion, we are raising a total of 160 million yen in Seed Round 2 (pre-valuation is 620 million yen, with negotiations ongoing targeting a March deadline). We are keen to partner with VCs and CVCs that can generate strong synergies with our Southeast Asian expansion and healthcare domain. Thank you for your time.

Q&A and Feedback

Mr. Nakazawa (Commentator): Thank you, Mr. Fujii, for your presentation. That is a very interesting approach. While Japan also has a reasonable market size, could you explain once again in more detail why you chose the Southeast Asian market as your primary battlefield, including a comparison with the Japanese market?

Mr. Fujii: Thank you for your question. In Japan, the number of pet ownerships had been slightly increasing over the past decade, but it is actually projected to start declining this year. This is due to stricter breeding regulations imposed on breeders. On the other hand, the Southeast Asian market is in a rapid growth phase, similar to Japan 10 years ago, and pet ownership is expected to explode going forward. In addition, due to the differences in regulations regarding online consultation and medicine sales as I mentioned earlier, we plan to build this advanced data-driven business model overseas first and eventually reverse-import it into the Japanese market.

Mr. Nakazawa: I see, so you targeted the regulatory flexibility and market growth. Could you tell us more about your actual transactions and partnership status with local veterinary hospitals and manufacturers, including some specific numbers?

Mr. Fujii: Yes. Locally in Malaysia, we have already started partnering with 18 veterinary hospitals, and transactions have just begun in January and February. For BtoB expansion, in February, we launched a test sales booth in cooperation with a major local retailer for one month, which received a massive response locally. We are currently receiving many inquiries from local manufacturers and retailers, and we are selecting partners sequentially to ensure smooth operations.

Mr. Nakazawa: Excellent. How is the schedule for the fundraising progressing? Also, what kind of investors are you hoping to partner with?

Mr. Fujii: We are currently in Seed Round 2 with a target of 160 million yen at a pre-valuation of 620 million yen, aiming to close by March. I am actually in Jakarta, Indonesia today, meeting with various local VCs. Next week, I will be traveling back and forth between Jakarta and Kuala Lumpur. We are eagerly seeking investments from VCs, CVCs, and angel investors who can provide local networks, logistics, and healthcare expertise in Southeast Asia.

Commentator: Thank you. Although it is through the screen, you look much darker and sharper than in your profile photo, giving the impression that you have completely blended in with the local environment.

Mr. Fujii: Thank you (laughs). When participating in various pitches and programs in Malaysia and Indonesia, I am often mistaken for a local staff member and passed by. I feel this is proof that I have successfully localized myself on the ground. We will maintain this momentum to capture the Southeast Asian market.