SmartHR pushes Tokyo IPO to 2025 as investors balk at $1B valuation

SmartHR's IPO delay underscores mounting investor skepticism about software valuations in an AI-uncertain environment. The company had achieved a ¥170 billion ($1 billion（約1600億円）) valuation in 2021, and KKR and Teachers' Venture Growth had backed a $140 million（約220億円） funding round in 2024, signaling strong institutional confidence. However, the gap between that recent backing and current investor caution on the $1 billion（約1600億円） target suggests the AI disruption narrative has shifted market sentiment in just months—particularly for software-as-a-service providers, whose competitive moats are perceived as vulnerable to large language models and AI-driven automation.

The delay also reflects broader headwinds in Japan's IPO market. First-half 2024 saw only ¥146 billion in new listings, matching 2022's low, and the number of small-sized IPOs last year hit a decade low, partly as the Tokyo Stock Exchange's reform push prompted companies to reconsider quick listings. SmartHR, as one of Japan's rare current unicorns, was positioned as a marquee candidate; its postponement signals that even well-backed, high-profile startups face pricing friction when investor appetite for software companies cools. The article notes that timing and valuation details could still change as discussions continue—a hedge that underscores both the fluidity of negotiations and the absence of a firm new date.