When an 18-meter tsunami demolished his soy sauce factories in 2011 and killed an employee, Michihiro Kono despaired about the future of the company his family founded two centuries ago.

Three years later, his plants are running again and sales have recovered to about 70 percent of what they were before a record earthquake hit Rikuzentakata, Iwate Prefecture. The source for the investment needed to rebuild? Crowdfunding cash, Kono says.

“Right after the disaster we were running on adrenaline, but after that, it felt like there were just too many problems to deal with,” said Kono, 41, the president of Yagisawa Shouten Co., which has 32 employees. “It was a race against time to raise funds for rebuilding while keeping all the workers employed, so even though we didn’t know anything about funds, when we were introduced to one, we went for it.”

The March 11, 2011, quake and tsunami killed about 18,000 people and caused ¥16.9 trillion of damage. While the government budgeted ¥25 trillion in five years for rebuilding, it has spent less than two-thirds of the planned amount each year due to trouble coordinating with local groups, according to the Reconstruction Agency. To cope with the government’s slow response, managers like Kono have gone online.

“Crowdfunding has become popular as a way for people to provide assistance after the disaster without actually having to go there,” said Yusuke Nakada, an analyst in Tokyo at Mitsubishi UFJ Research & Consulting Co., a unit of the nation’s largest banking group. “It’s not only a tool for companies to raise funds, but it’s also a way to find users that will buy their products.”

Websites for crowdfunding raised an estimated $5.1 billion globally in 2013 versus $2.7 billion in 2012, according to research firm Massolution. While specific figures are not available for Japan, activity has definitely increased since the 2011 disaster, Mitsubishi UFJ Research’s Nakada said.

Crowd Securities Japan Inc.’s Crowd Bank, based in Tokyo, has gathered ¥2.4 billion since starting operations in December 2013, according to its Internet page. Maneo Market Inc., also in Tokyo, tripled the money it oversees to ¥4.8 billion in the two years to March 31 last year, according to its website.

Kono has procured ¥150 million via two funds organized through Music Securities Inc., a Tokyo-based investment and musician management company led by the former drummer of a rock band. The funds offer shares at ¥10,000 each, with half counted as a donation and the rest an investment that may or may not pay dividends, according to its website.

“A lot of the people making these investments are doing it not so much because they want to make a profit but because they sympathize with the companies and their efforts,” said Masami Komatsu, the president of Music Securities. “It gives people a warm feeling to be able to make this sort of investment, and half the amount is donated.”

Daisuke Koyasu, 38, a food and beverage consultant who works in Tokyo, said he has invested in Yagisawa Shouten and a noodle-maker.

“Rather than donating to some faceless organization, I wanted to put my money somewhere that I was familiar with,” Koyasu said.

Komatsu said he met Kono after tweeting the fact he wanted to set up a fund to help companies damaged by the quake. A city government official who saw it introduced him to the soy sauce-maker. Komatsu said he convinced the nation’s financial regulators to allow part of the money raised via crowdfunding to be counted as capital. That improved Kono’s credit quality, allowing Yagisawa Shouten to once again take out bank loans.

Kono is not the only one in Rikuzentakata getting cash with the help of Music Securities. Masayuki Kimura, a neighbor who runs a sweets shop, watched as his request for government assistance was rejected because the priority was on helping companies with lots of employees, such as building and construction firms.

The government has struggled to use all the rebuilding funds in its budget. In the year ended March 2014, it only spent 65 percent of planned outlays, in line with the previous year, according to the Reconstruction Agency. Prime Minister Shinzo Abe set aside about ¥1 trillion in an extra budget this month to speed up regeneration efforts.

When Kimura, 57, heard about Kono’s success with crowdfunding, he decided to give it a go himself, and took the bullet train to Tokyo to talk with Music Securities. Six months later, Kimura raised ¥25 million, which he used to rent a temporary store and buy equipment.

“The fund started providing us cash even before the full target was reached, so that made things easier,” Kimura said. “We’re preparing to open the shop on March 7 and stock new sweets plus hire 10 or more employees.”

According to Music Securities’ website, it has raised ¥1.08 billion to help fund earthquake reconstruction efforts via about 40 funds. Music Securities makes its money on such projects by charging a ¥500 fee for each ¥10,000 share in a fund.

Beneficiaries include a business that is helped bring back strawberry farms to the town of Yamamoto in Miyagi Prefecture after the tsunami wiped out about 90 percent of the fields and another that has helped repair a 163-year-old sake brewery in the city of Miyako, Iwate Prefecture.

When the record temblor struck, Kono was having a meeting with his executives. Fleeing from the impending tsunami, he ran up the hill to a Shinto shrine, where he met neighbors including Kimura. Toshiyuki Sasaki, one of Kono’s employees and a volunteer firefighter who was 47 years old at the time, went to close a sluice gate. He never returned. Sasaki was one of the 1,808 city residents who perished that day.

The government has piled mounds of earth where Kono’s old soy sauce plants stood, about a kilometer from Hirota Bay, as a barrier to protect the area from any tsunamis in the future. Using the crowdfunding cash, he has built a new factory about 20 kilometers inland from the old site, in an area surrounded by rice paddies and trees.

“People would have despaired if, after the tsunami swept away their homes, took away their families and the community itself disappeared, they also lost their jobs,” Kono said. “Almost four years on, we’re finally feeling like a real soy sauce-maker again.”

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