General Atlantic Invests $96 Million in SmartHR Secondary Round, Signaling Maturing Japanese Market

Global growth investor General Atlantic has made a strategic minority investment of US$96 million (JPY¥14.6 billion) in Japanese HR tech leader SmartHR, acquiring a stake from early investor Coral Capital. The transaction, announced on November 18, 2025, underscores a growing trend of international capital flowing into Japan's maturing startup ecosystem, particularly through secondary market deals. James Riney, founding partner at Coral Capital, recently discussed the implications of this investment, including why a global investor like General Atlantic chose to act in Japan and how secondary transactions are reshaping the industry.

The investment represents General Atlantic's first growth equity investment in Japan, highlighting the firm's confidence in SmartHR's potential and the broader Japanese market's digital transformation. SmartHR, a prominent cloud-native human resources management platform, offers solutions for employee management, payroll, and social insurance procedures, catering to a wide range of businesses and facilitating the digitization of Japan's workforce. Coral Capital, which initially invested in SmartHR through Japan's first SPV of its kind in 2017, will remain a committed minority shareholder.

The discussion, featuring Riney alongside Miyata Shoji, Yajima Ryotaro, and Ii Ryotaro, delved into the "SmartHR and Coral's decision-making process" behind the secondary sale. This type of transaction allows existing shareholders to realize returns, providing liquidity without requiring an IPO or full acquisition, and enables new strategic partners like General Atlantic to enter established, high-growth companies. General Atlantic and Coral Capital plan to collaborate closely with SmartHR's management to accelerate product innovation, pursue strategic partnerships, and enhance customer engagement.

The increasing prevalence of secondary transactions in Japan is indicative of a healthy and evolving startup ecosystem. These deals provide flexibility for investors and founders, offering alternative exit strategies and attracting significant foreign capital. Experts view such investments as a crucial development for Japan, as they help to foster a more dynamic investment landscape and support the continued growth of its tech sector.