Establish new business field to substitute people’s hearing

Koji Mitsumoto
Representative Director and CEO, Hmcomm Inc.

Establish new business field to substitute people’s hearing

Hmcomm Inc. is a venture business that engages in research and development of AI specific to voice, and offers products and services based on it by utilizing the voice processing technology developed by the National Institute of Advanced Industrial Science and Technology (“AIST”). The company promotes business with emphasis on solutions for call centers and has been achieving steady results. We spoke with the founder, Representative Director, and CEO Koji Mitsumoto on the background of starting the venture and its relationship with Mitsubishi UFJ Capital (“MUCAP”).

Background

—Create an environment that nurtures engineers who can cross swords on the global stage with their technology

I worked for a major software development company for a long period of time. I started with software development, worked as product manager and then was engaged in management of the organization.
In Japan, software development has been carried out as contract-based development, in which software is developed upon receiving an order from a corporate customer. This business model can be termed as similar to the general contractor in the civil engineering and construction industry.
On the other hand, we have the U.S. Silicon Valley style, which is the mainstream today. Companies raise funds on their own to create what they want by developing the technology and putting together a product, and seek the market’s opinion, at their own responsibility. Global IT companies such as Apple, Microsoft, Google, and Facebook began this way, grew, and became giants. They won the appreciation of the market and the world.
Which of these environments, the severe global market or a market protected in a sense by contracts, is more suitable for nurturing engineers with high skill levels? The answer is obvious.
Just like a global IT company from the U.S. does, I wanted to take risks by ourselves and play with our technology and achievements. I wanted to create an environment that nurtures super programmers and engineers who won’t lose to engineers at global IT companies. I was more than certain that Japan will definitely need such human resources in the future. This may sound too smart but it is true that this occupies a significant portion of my motivation for becoming independent and starting a company.

The role of MUCAP

—Idea of commercializing Speech to Text of call centers

After leaving the previous job, for about two years I was helping out software development of customers on my own by leveraging the contacts I had built. At one time, I went to the Philippines with a friend from my previous job. The Philippines was doing brisk business as an outsourcing destination of call centers of North American companies, as the people there are native English speakers. I became especially interested in many operators receiving phone calls from customers and writing down the content of the phone calls (Speech to Text). Converting voice, which is unstructured data, into text, which is structured data, enables easy search, and you can utilize that data in many ways including as a subject for training, as materials for improving customer satisfaction, etc. I felt that this trend till sooner or later come to Japan and I wanted to do this in Japan. Initially, I thought of gathering people who can speak Japanese in the Philippines, where labor cost is low, but then I came up with the idea to automate it using voice recognition technology.
After coming back to Japan, I was checking out many things about voice recognition and learned about AIST’s technology transfer venture system. I applied to it, went through selection and was accepted as an AIST venture. This enabled me to use the excellent voice recognition technology owned by AIST. AIST introduced me to MUCAP in 2014, when we made a fresh start as an AIST venture.
When I met Mr. Nuibe, who is in charge at MUCAP, for the first time, I was not fully ready and did not have a proper business plan. Still, I needed funds. So, I tried to enthusiastically tell my story, but I believe I must have been going round in circles at times.

Our relationship with MUCAP

—Multifarious support including introduction of venders and investors

Even so, Mr. Nuibe gave us sincere support and contacted me on a regular basis. That was the difference with other venture capitals. Officials of other companies would meet us first, but they would not see us again if what they felt in the first meeting was not to their liking. Some even did not reply to my email. On the other hand, Mr. Nuibe responded to us with enthusiasm and introduced us to companies that may possibly generate synergy effect with us, even though there was no capital relationship between MUCAP and us. We had exchanges like that for about one and a half years, and when I reported to him that we would soon be signing a contract with a major business, Mr. Nuibe suggested us to draft a detailed business plan and even helped us in its preparation. This led to fund raising in Series A. Right after that, Mr. Nuibe introduced us to a wide range of companies including a major mail order company, railway operator, device manufacturer, system developer, consulting firm, credit card company, and travel agency, and we were able to sign contracts with some of these companies, which gave a strong boost to our business expansion. Majority of the companies that have invested in us had been introduced by MUCAP. Some were introduced to us as potential customers and then subsequently decided also to invest in us, so we came to know most of them through MUCAP.
MUCAP, as a member of the Mitsubishi UFJ Financial Group, has relationships with a very wide range of companies, and I believe that is the backbone of the high potential we have as a VC. Incidentally, Mr. Nuibe is serving as an outside director of our company.

Future perspective

—Aiming for global expansion of the business that substitutes people’s hearing

Till now, we had been engaged in research and development aimed at mastering the Speech to Text field based on the voice recognition technology of AIST, while pursuing commercialization primarily of solutions for call centers. Recently, we carried out fund procurement of Series B, with MUCAP investing as the lead investor, in preparation for the upcoming full-fledged sales expansion phase. Our aim for the time being is to capture a certain level of share in the call center solutions business using this fund as the capital.
We have also developed an AI operator which can respond naturally without human assistance, by combining voice recognition, voice synthesis, and natural language processing. This solution, named Terry, has been adopted by a major mail order company and a major electronics retail store and has been demonstrating its effectiveness in addressing operator shortage at times when number of calls increase sharply. Further, we are also taking on the challenge in the business of anomaly sound detection from voice feature. For example, this is being applied in various fields such as in detecting illness from the squeals of pigs in the animal husbandry field and detecting faults in the equipment and facilities field. We will polish the product further and hope to expand globally as a SaaS model.
While there are quite a few vision-related venture businesses, there are hardly any involved in substituting hearing even if you look globally and it can be called a blue ocean field. We intend to steadily and firmly push forward for the next leap.

2019年11月　取材

Company

Hmcomm Inc.

https://hmcom.co.jp/?lang=en

Primary business activities

Research and development of artificial intelligence and deep learning technology specializing on sound, and offering of related products and services.

Company History

2012	July	H&M Communication Corporation founded (Yokohama)
2014	June	Company name changed to Hmcomm Inc.
2014	August	Tokyo Branch opened AIST technology transfer venture certification.
2016	December	Raised funds through a private placement of new shares (Series A).
2017	March	Head office relocated to Toranomon, Minato-ku, Tokyo.
2018	June	Raised funds through a private placement of new shares (Series B).
2019	December	Raised funds through a private placement of new shares (Series C).

“Real Voices”