After losing billions on mobile bets, Japanese e-commerce giant Rakuten raised ~$1.9B for mobile and plans to sell stakes of its banking and securities units
Japanese e-commerce giant Rakuten Group Inc. sold 250 billion yen ($1.9 billion) of bonds on Friday, giving the company …
Context & Ripple Effects
Rakuten's mobile push began with its 2017 plan to apply for a 4G license and spend $1.76B on infrastructure to become Japan's fourth carrier targeting 15M subscribers. The bet has since burned cash: by late 2023 the MVNO held only about 2.5% market share and had stacked up 13 straight quarters of operating losses totaling roughly $5.5B.
This bond sale is the third major funding round of the campaign, after the $2.2B share issuance to Walmart, Tencent, and Japan Post in 2021. What changed now is the funding source: rather than issuing more equity, Rakuten is borrowing against itself and preparing to sell stakes in its profitable banking and securities units — the same online bank whose planned IPO founder Hiroshi Mikitani was defending to investors last year.
First-order effects
- The ¥250B (~$1.9B) in bond proceeds goes directly into the loss-making mobile business, buying runway without further diluting existing shareholders like Walmart, Tencent, and Japan Post.
- Selling stakes in the banking and securities units means Rakuten starts giving up ownership of its most profitable fintech assets to keep the carrier alive.
Second-order effects
- The planned bank IPO becomes harder to control as outside stakeholders enter ahead of it, pressuring the valuation Mikitani has been defending since he faced investors over the bleeding mobile unit in 2022.
- Each round of asset sales narrows the synergy case that justified the mobile bet in the first place — the loyalty-and-finance ecosystem that once produced ideas like the Rakuten Coin loyalty cryptocurrency gets carved up to fund network costs.
Third-order effects
- If the pattern holds, Rakuten ends up as a minority holder in its own financial group while running a sub-scale carrier — a cautionary template for how e-commerce players fund fourth-carrier ambitions against entrenched incumbents.
- Repeated equity raises followed by debt and asset disposals signal that capital markets will no longer fund subscriber-growth stories at any price; profitability milestones, not market-share targets, become the gate for the next tranche of funding.
The trend: Rakuten's mobile venture is shifting from growth-funded expansion to asset-funded survival, with its banking and securities stakes becoming the collateral for a fourth-carrier bet that never reached scale.