Announcement of Capital and Business Alliance with Gurunavi, Inc.

SHIFT Inc. (“SHIFT,” headquartered in Minato-ku, Tokyo, Japan; Masaru Tange, CEO and Representative Director) announced today that it has formed a capital and business alliance (this “Alliance”) with Gurunavi, Inc.　(“Gurunavi,” headquartered in Chiyoda-ku, Tokyo, Japan; Akio Sugihara, President and Representative Director), entering into a share subscription agreement to purchase common shares through a third-party allotment and acquire a 4.10% equity interest in Gurunavi.

1. Reason for the capital and business alliance
As SHIFT has been expanding its software quality assurance business since 2009, it has served clients in a wide variety of industries, such as financial, retail, logistics, and entertainment. Moreover, toward achieving its growth strategy, “SHIFT 1000,” which aims at ¥100 billion of net sales, SHIFT has been strategically acquiring businesses to expand and enrich its service portfolio. SHIFT has also shifted its corporate branding from “SHIFT as a software testing company” to “SHIFT as a sellable services producer” to realize ¥100 billion of net sales. As this new catchphrase indicates, SHIFT will commit to bringing success to the businesses of its customers.

Recently, due to the impact of COVID-19 since last year, the restaurant industry faces an extremely challenging situation, as consumer demand for restaurants has been decreasing. In addition, the restaurant industry is required to undergo structural changes to respond to changes in consumer lifestyles triggered by COVID-19, such as the spread of remote work, more frequent use of to-go and delivery services and the spread of electronic commerce (“EC”). In addition, the restaurant industry needs to address a wide range of social needs that are expected to be more diversified in the future, such as globalization, the declining birthrate and the aging society, and the accelerating DX trend.
Under this fast-changing business environment surrounding the restaurant industry, Gurunavi aims to contribute to the rebuilding of and the sustainable development of the restaurant industry by acceleratingly evolving itself into “a company to support restaurant management” with its founding philosophy, “protecting and nurturing Japanese food culture.” As specific strategies toward this goal or its philosophy, Gurunavi aims to 1) strengthen its core restaurant management support business and 2) focus on the creation of new businesses.
First, with respect to 1) strengthening its core restaurant management support business, Gurunavi seeks to transform its eat-in reservations service into a much more comprehensive food service platform that enables to-go and delivery services, EC, and other cross-uses. This allows the platform to (a) be more useful to consumers, (b) expand customer referrals to restaurants and (c) help restaurants improve sales by adding their sales channels. Gurunavi also develops digital technology to support restaurant operations, such as the procurement of ingredients, food and drink products, reservations and customer management, and customer service, in order to improve efficiency and profitability.
Next, regarding to 2) focusing on the creation of new businesses, Gurunavi aims to contribute to the development of the restaurant industry as a whole, as well as individual restaurants. Specifically, it has begun to support suppliers to improve their operational efficiency and to expand their sales channels in placing/ receiving orders. It also started to develop products and provide sales promotion support service to food manufacturers by utilizing its extensive data on food products and consumer behavior.
Gurunavi considers it necessary to form strong alliances with companies that possess know-how, data, and customer networks in order to enhance the driving force and effectiveness of the above-mentioned measures. Accordingly, Gurunavi has been discussing capital and business alliances with potential partners.

SHIFT has been advocating its new concept of “DAAE” aiming to rebrand itself as a sellable services producer.” “DAAE” is a SHIFT-developed concept that emphasizes “Design,” “Agility,” “Assembly,” and “Economic Quality” and is made a new acronym. SHIFT foresees that in the future, the Japanese technology industry will face more challenging and sophisticated demands from users, more competitive market environments and more requirements to shorten development cycle time. Under these circumstances, it will be crucial to develop services centered on DAAE, replacing the concept of “QCD(*1),” which is widely insisted to be essential in Japan’s conventional manufacturing industry.
Since its launch in September 2019, when SHIFT started to deliver the services centered on “DAAE,” SHIFT has accumulated wide-ranging knowledge while expanding its service. Through this alliance, SHIFT will provide value-added services using the “DAAE” concept to the restaurant industry, which has considerable room for digitization, thereby further make successful cases as “SHIFT as a sellable services producer” and enhance its corporate value.

SHIFT will thoroughly cooperate with Gurunavi in building its service platform provide, from planning and designing to development and testing. Specifically, Gurunavi has set the purpose of capital use that it raised as followings:
1. The launch of third-party delivery services
2. The establishment and enhancement of mobile order services
3. The establishment and enhancement of services to support placing/ receiving orders of food
4. The improvement of the functions of software tests (quality control)
In response, SHIFT will provide both “DAAE” and “quality assurance” services, set a staring committee that top management of both companies and commit to realizing DX in the restaurant industry.

Since its launch of software testing business in 2009, SHIFT has provided services to customers in wider range of industries, while accumulating knowledge, from budget planning and designing to UI/UX that enables to reach out to more users. With “DAAE” service, SHIFT aims at co-creating service platform with Gurunavi, using the accumulate knowledge.

Through this alliance, SHIFT intends to further accelerate its growth. Moreover, by partnering with Gurunavi that contributes to the rebuilding and acceleration of the growth of the restaurant industry, one of key parts of Japanese culture, SHIFT will thrive much more to support the advancement of Japanese society that is feeling vague anxiety as a whole due to the invisibility of future changes and developments.

*1: QCD is a term that consists of three concepts: Quality, Cost, and Delivery. It has been widely advocated to be crucial for “ever-improving manufacturing” in Japan whose manufacturing industry has been globally competitive.

For further information, please kindly refer to the document below.
20210825_Gurunavi_EN