Japan fintech startup focuses on hedge funds with equity-research

Japan-based fintech venture Nowcast Inc. has announced that it will begin providing automated earnings estimates of consumer goods to hedge funds by analyzing millions of transactions at retail stores, according to the company CEO Ryota Hayashi.

According to reports by Bloomberg, the Japanese startup is entering into the equity-research business in a move to challenge the dominance of securities firms by predicting companies’ earnings. Hayashi sees this move as an opportunity for Nowcast to find other ways to estimate companies’ results and sell it to active investors like hedge funds.

“This doesn’t mean analysts won’t be needed anymore. But we can replace some of the routine work around financial results, leaving the analysts to look at the longer-term trends affecting industries,” Hayashi said in an interview, as reported by Bloomberg.

The fintech firm is expecting to begin predicting the results of about 200 companies including food makers Calbee Inc. and Meiji Holdings Co. and cosmetics maker Shiseido Co. Hayashi also mentioned that the company plans to expand the number to 1000 by next year including firms in China and the U.S.

The company has finished with the testing phase that showed high level of accuracy in estimating results of mainly domestic-focused companies with simple structure and subsidiaries.

“We want to make this a standard service for investors - something that they feel they must have,” Hayashi added.