A 26-Year-Old Billionaire Built Fortune on Virtual YouTube Stars
Riku Tazumi founded Anycolor when he was still a university student, and shares of his company have surged eightfold since their Tokyo debut in June.

Japan has moved on from real-life YouTube stars to virtual ones, and a talent agency managing the humans behind those avatars has produced one of the youngest billionaires in the country.

Shares of Anycolor Inc. have jumped eightfold since going public on the Tokyo Stock Exchange in June, making it one of the best performers on the market and valuing the firm at about 370 billion yen ($2.5 billion). The 45% stake its 26-year-old founder, Riku Tazumi, owns is now worth $1.1 billion, even after the yen slumped to its lowest level in decades against the US dollar.

Anycolor Inc. Website
Anycolor's website.Photographer: Takaaki Iwabu/Bloomberg
Anycolor’s stellar performance stands out in a year when global investors have shunned high-growth names trading at lofty multiples. The firm’s fruitful debut suggests market confidence in Japan’s ability to monetize its devoted anime and pop-idol culture and turn those intellectual assets into cash cows. Anycolor currently manages about 140 creators, and each works on a different animated character for YouTube.

“Talent agencies have traditionally been an extremely strong business within Japan,” said Masahiro Hasegawa, an analyst at research firm Humanmedia in Tokyo. “People are betting that this is the next generation of such businesses.”

Anycolor declined multiple requests for an interview.

A key attraction for investors is the company’s potential to expand overseas, unlike conventional domestic talent agencies like Johnny & Associates. Johnny’s stable of pop-idol groups, which includes Arashi and Snow Man, has a huge fan base in Japan but only a small presence outside its home market.

In its first earnings release last month, Anycolor reported its operating profit almost tripled to 2.1 billion yen for the three months through July from 842 million yen in the same period last year. Sales for its global service in English — used by viewers both at home and abroad — doubled to about 1.6 billion yen from the previous quarter. Anycolor shares soared 46% in the following three days.

“There was a huge jump in the sales of its global business,” said Tomoichiro Kubota, senior market analyst at Matsui Securities. “People are thinking that this company is headed for big growth and are loading up on its shares.”

The firm’s popularity is driven by virtual characters performing on YouTube under the brand name Nijisanji. These VTubers, or virtual YouTubers, usually play online video games while actively interacting with those watching their live-streamed shows. It’s analogous to game streamers on Amazon.com Inc.’s Twitch, but on a different platform and with the appeal rooted in anime.

Also read: How Virtual Streamers Became Japan’s Biggest YouTube Attraction

Not many businesses succeed in monetizing through YouTube, but these virtual idol characters allow Anycolor to go beyond ads by selling merchandise to fans, according to Kubota. At the same time, VTubers don’t require the high costs associated with throwing big offline concerts or performing on TV shows that regular pop bands do. The company reported an operating profit margin of 36% for the July quarter.

“Fans tend to use a higher portion of their disposable income on these stars than your average consumer,” allowing the business model to work, Hasegawa said. “And now, we’re seeing this culture — that began in Japan — spread overseas.”

Some are questioning the quality of the VTubers' videos, saying it isn’t on the level of top-tier Japanese animations or music labels. But boosting it would be costly, Hasegawa said. Investors will need to see the earnings growth sustained in coming quarters, according to Matsui’s Kubota.

Bilibili App and Advertisement As Video Streaming Platform Said Poised to Raise $2.6 Billion in Hong Kong Listing
Anime characters on the Bilibili app.Photographer: Roy Liu/Bloomberg
China’s Bilibili Inc., a provider of online entertainment including VTubers, saw its shares go on a huge surge during the pandemic’s boom before plummeting more than 90% as the global economy soured and losses mounted. The company, which may be forced to delist from the Nasdaq due to US-China tension, this month added a primary listing in Hong Kong.

Anycolor founder Tazumi set up the Tokyo-based firm in 2017, when he was still a university student. Then named Ichikara — which literally means “from scratch” — the outfit wanted to use anime as the gateway to becoming a next-generation entertainment company that wouldn’t be “bound by the traditional framework of the industry,” Tazumi wrote on the firm’s website.

“It’s like Tesla insofar as there’s always talk of the stock being overvalued,” Hasegawa said. “But investors are people who want to bet on the future, and there are some high expectations here.”