Y Combinator, Global Brain back Tailor, a Japanese headless ERP startup

Tailor, a Japan-based backend enterprise resource planning (ERP) platform, said today it has raised $4.3 million in seed funding from Y Combinator and Global Brain.

Founded in 2021 by Yo Shibata and Misato Takahashi, Tailor provides a headless ERP platform, meaning an ERP without a front-end, instead delivering data from back office systems like finance and procurement to other applications via API, Shibata told TechCrunch.

Legacy ERPs provided by companies such as SAP, Oracle and NetSuite (which is owned by Oracle), and local players like OBIC, are difficult to customize for users, according to Shibata. One of the reasons is that their system are typically built for the world’s largest organizations, making them ill-suited and expensive for small and medium businesses’ projects, Shibata said, often leaving these ERP customers frustrated by the vast number of features and the complexity of the user interface, he added.

Japanese enterprises have been suffering from high maintenance costs and slow development. The company says approximately 70% of the software industry spend in Japan goes to building customized products.

Shibata claims that Tailor’s API-first approach should make it easier for enterprises to integrate with another third-party SaaS tool and help users build their tailor-made internal tools faster.

Serial entrepreneurs Shibata and Misato have previously founded a retail-tech company Spotlight and sold it to Rakuten for $ 20 million in 2013. They reunited again last year for a bigger challenge, aiming to enter the global market with Tailor’s ERP platform and with the ambitious goal of reaching $1 billion in revenue.

The Japanese startup currently has one customer and ten employees but plans to double its headcount to 20 employees by the end of this year. With the seed money, the company will enhance its product capability and developer onboarding features, Shibata said. Additionally, the company intends to prepare the product for developers in the U.S. and sell it in the U.S. market, aiming for 2023.

“We aim to transform the way to build the internal business software for enterprises,” Shibata said.