$2.5 billion Japanese AI startup taps Vietnam market

AI Inside, a $2.5-billion Japanese artificial intelligence startup, has entered Vietnam through a partnership with a local company as part of its global expansion strategy.
January 30, 2021 | 11:28
japanese enterprises to expand production in vietnam in 2021 Japanese enterprises to expand production in Vietnam in 2021
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Orders for AI Inside's software surged last year as governments scrambled to process documents during the COVID-19 pandemic. (Photo: AI Inside)

AI Inside recently agreed to sell its text recognition software, which includes the Vietnamese language, through OCG Technology, a joint venture between a unit of state-owned Vietnam Posts and Telecommunications Group and Japan's Nippon Telegraph and Telephone. It aims to tap Vietnamese companies that want to automate manual tasks like typing handwritten forms into spreadsheets.

"We will be putting a lot of effort into global expansion this year," founder and CEO Taku Toguchi said in an interview. In addition to Vietnam, the company is also planning to enter Thailand and Taiwan.

The 5-year-old startup's Asia expansion highlights how some Japanese software startups, hot on the heels of a boost in demand from the pandemic, are racing to build a footprint overseas, said Nikkei Asia.

Its share price has increased fivefold since its initial public offering in December 2019, giving it a market capitalization of $2.5 billion. The company is also planning to expand to other Asian markets like Thailand and Taiwan, according to VN Express.

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AI Inside staff inside an office. (Photo courtesy of AI Inside)

AI inside is a startup that uses a unique form of AI to recognize images. The company initially created a product in the field of AI-based OCR for handwritten forms. It quickly turned this product into a service and reached the number 1 position in the field. Using AI inside’s product allows for instantaneous, highly accurate digitization of documents that had previously needed to be input by hand.

The major shift came last year when AI Inside's orders surged as companies and local governments scrambled to process paper documents such as handwritten applications, especially after the Japanese government declared its first state of emergency in April. The number of contracts for the company's optical character recognition (OCR) software, which can convert handwritten letters into text, more than doubled between July and September to 12,700. New customers included local cities that needed to rapidly process 100,000 yen stimulus handouts during the summer.

The company expects to turn a profit of 1.1 billion yen ($10.6 million) for the fiscal year ending March 2021, nearly triple the figure in the previous year. Its share price has increased more than fivefold since its initial public offering in December 2019, giving it a market capitalization of $2.5 billion as of Jan. 13.

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