Innovative work app company Timee jumps on Japanese stock market debut

Shares of Timee Inc. — maker of an innovative job-search app that is helping to solve Japan’s severe labor shortage — rose 14% in its first day of trading.

The stock closed at 1,650 yen on Friday on the Tokyo Stock Exchange’s Growth Market, following the country’s largest initial public offering this year. The shares sold for 1,450 yen, the high end of the expected range. The Tokyo-based company’s market value of about 157 billion yen makes it the largest among 95 application software companies listed in Japan since 1994, according to data compiled by Bloomberg.

With a chronically low birth rate, an aging population and strict immigration policies, jobs are in short supply in the world’s fourth-largest economy. The Bank of Japan’s latest Tankan business sentiment survey showed shortages are growing, particularly among non-manufacturers, which are experiencing the worst labor shortages in more than 30 years.

Timee’s service aims to fill the gaps in so-called “temporary work,” which matches employers with job seekers for specific periods of time and in specific locations. Such arrangements offer more flexibility than traditional part-time jobs, as well as odd jobs such as ridesharing and food delivery.

The company will not receive any of the roughly $300 million in IPO proceeds because the shares are being sold by holders including Ryo Ogawa, the company’s chief executive, and online advertising firm CyberAgent Inc. Still, going public could help the company increase its visibility among customers, job seekers and investors.

“We want to offer our services to broader industries such as hospitality, nursing, child care and manufacturing,” Ogawa said in an interview Tuesday. “We will aggressively accelerate investments, gaining credibility and security as a public company,” he said, adding that future mergers and acquisitions are possible.

Most of the startup’s client companies are in logistics, food service and retail, Ogawa said. While gig work is still a new concept, Timee has already attracted competitors, with Mercari Inc. launching a similar service in March and owner Indeed Recruit Holdings Co. planning its own offering later this year.

Clarence Chu, an analyst at Aequitas Research Pvt., said Timee “appears to be a leader in an untapped and under-penetrated space.” The company’s shares “likely could end up trading at a premium to all of its peers,” he wrote in a note on Smartkarma, adding that “Timee’s growth has been exponential over its relatively short operating history.”

“Timee is such an early entrant that such employees have become known as ‘Timee-san,’ much like how ‘Googling’ came to refer to a specific business,” Jefferies analyst Ken Oiwa wrote in the report, beginning his analysis with a buy rating. “Timee has collected significantly more data than its competitors, which is a huge differentiating factor.”

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