Tomomichi Takahashi became a multimillionaire by focusing on the dullest of white-collar tasks.

The former SoftBank Group Corp. employee was an early mover into what’s called robotic process automation, the use of software bots to automate repetitive operations.

The Japanese entrepreneur stumbled into the business by chance, turning to it as a last resort when his consulting firm was on the ropes during the financial crisis.

It was a winning move. Takahashi’s company — now called RPA Holdings Inc. — listed last year on the Tokyo Stock Exchange. The shares surged, and so did Takahashi’s wealth. His stake in the company is worth more than $360m.

“It was like hell,” the 48-year-old entrepreneur said of the period after Lehman Brothers Holdings Inc. collapsed in September 2008. “We decided to do whatever it took to survive.”

Takahashi’s firm provides so-called software bots for more than 500 companies, including Mitsubishi UFJ Financial Group Inc., the largest lender in Japan, Nippon Life Insurance Co. and his alma mater, Masayoshi Son’s SoftBank Group. It helps them to automate routine tasks such as inputting data and checking invoices.

The company is at the forefront of an industry on the rise. Global spending on robotic process automation software was estimated to reach $680m in 2018, up 57 percent from the previous year, and is on course to total $2.4bn by 2022, according to research from Gartner Inc. The new technologies are particularly welcome in Japan, where a shrinking workforce is causing the tightest labor market in decades.

SoftBank Past

Takahashi started out in the consulting industry, working for the Japan arm of Andersen Consulting, which is now known as Accenture, for about three years before joining SoftBank in 1996. At SoftBank, which was a much smaller company then, Takahashi was involved in everything from corporate planning to accounting, and helped launch a major satellite broadcasting joint venture. He says Son had a profound influence on him.

“I was lucky because I could work directly with Son,” he said. “He always told us that if anyone was going to ride the digital and IT revolution, shouldn’t it be us?”

Consulting Firm

Taking those words to heart, Takahashi decided to set out on his own. In 2000, he established the predecessor of RPA Holdings. The company, which helped big firms enter the internet business, combined his past experience in consulting with his knowledge of the IT world from his time at SoftBank Group. But that model came unstuck in the financial crisis. With firms having to cut non-essential costs, consulting fees got the ax. Takahashi says about 40 percent of his company’s projects were canceled. He was running out of money.

“I thought the business I’d been building for eight years was going to disappear,” he said. “Firms can cut consulting contracts with no problem. I wanted to do something where we’d have a deeper involvement with customers, where we’d be a source of value.”

Japanese mortgage lender Aruhi Corp. started using RPA Holdings’ services in January 2017 to automate some application processes. It deploys software bots to input data from scanned loan applications and then check that everything is in order. That’s cut the average time taken per application to about 10 minutes from an hour.

Stock Surge

“Software bots are booming now and software vendors are increasing, but back then RPA Holdings was the only company which had a good track record in Japan,” said Tetsu Nishida, who heads the IT department at Aruhi.

RPA Holdings listed on the Tokyo bourse’s Mothers market for startup firms in March, and surged more than fivefold to a high early the next month. While it has since pared some of those gains, it’s still up more than 350 percent, with a market value of more than $790m. Takahashi, the largest shareholder, held a 45.8 percent stake as of Aug. 31.

Valuations have gotten ahead of profits. The stock trades at 98 times estimated earnings for next fiscal year, compared with an average of 49 times for the Mothers Index.

Shota Watanabe, a fund manager at Rheos Capital Works Inc., which holds RPA Holdings’ shares, said the company has considerable growth potential as its business can help Japan to solve social and economic problems. But the stock’s valuation is too high, he said.

Next Steps

The company’s challenges include getting its products used at smaller firms, and maintaining its advantage as more competitors enter the field, according to Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co. in Tokyo. Kawasaki maintains an outperform rating on the stock and a target price of 4,000 yen, 22 percent higher than Tuesday’s close.

Takahashi says the next step is to go beyond robotic process automation to create other services and businesses using artificial intelligence. And while the company forecasts that sales will more than double to 9.1bn yen in the fiscal year ending February, he’s setting his sights on much higher revenue in the years ahead.

“There’s a huge market for software robots using AI technologies,” he said. “Just like industrial robots in factories, if software bots can take on the tedious routine work in offices, we can create a productivity revolution for white-collar jobs.”