Oct. 14 (Bloomberg) -- Innovation Network Corp. of Japan agreed to buy a minority stake in Royal Gate Inc., a developer of mobile payment devices and systems, three people with knowledge of the matter said.
Government-backed INCJ plans to invest as much as 1 billion yen ($10 million) for a minority stake in the Tokyo-based company, said the people, who asked not to be identified before an announcement scheduled for tomorrow. Shareholders of the company, including Mizuho Capital Co., may make an additional investment, the people said.
Royal Gate’s devices allow credit card charges to be made to smartphones and other mobile devices. The market for tools that help consumers buy goods using handsets is projected to reach $235.4 billion in global transaction value this year, up 44 percent from 2012, according to a June 4 report from researcher Gartner Inc. That includes money transfers, bill payments and merchandise purchases.
INCJ expects to profit from the investment if Royal Gate has an initial public offering, one of the people said. INCJ was formed in July 2009 by then-Prime Minister Taro Aso’s administration to invest in technology that would make Japan more globally competitive.
An INCJ spokesman declined to comment. Akira Fujii, a spokesman for Royal Gate, declined to comment.
Royal Gate will use the new funds to hire additional staff and for expansion into Southeast Asian countries including Indonesia, one of the people familiar said.
--Editors: Aaron Clark, Robert Fenner