A Tokyo-based startup specializing in the business of recycling clothes is slated to proceed to the final stage of an annual global startup competition, scheduled to be held in San Francisco in May of next year.

Jeplan Inc. won the Japan round of the Startup World Cup 2019, held last Friday at the Tokyo International Forum, beating nine other rivals chosen from over 150 applicants.

The startup, which was founded in 2007, introduced a polyester-outfit recycling business model. It also aims to help reduce excess amounts of clothing produced by the fashion industry and bought by consumers, the firm said.

“The textile industry is huge but unfortunately, recycling is not well-developed,” said Hiroki Sugiyama, senior manager at Jeplan, during a presentation. Each startup was given 3½ minutes per presentation, which was required to be given in English.

According to research by the Environment Ministry in fiscal 2015, 31 percent of 11,469 respondents said they reuse their clothes mainly by selling them to shops or others via internet auctions, while 13 percent just dispose of them.

“With our business model … we can make a T-shirt out of T-shirts like this,” said Sugiyama, showing off one he was wearing.

The startup repurposes polyester via chemical processes. Its technology dissolves polyester to the molecular level, removes contaminants and then creates a substance called BHET, or bis (hydroxyethyl) terephthalate. Sugiyama added that Jeplan intends to license this technology to other companies.

Sugiyama said Jeplan also runs a brand that collects unsold second-hand clothes from retailers including Aeon and Muji. He stresses that the startup is not just a chemical technology maker.

Jeplan will participate in the Startup World Cup final in San Francisco in May, when it is expected to compete with 40 or more rivals from around the world.

“We are very honored not only because we were able to compete here but (the judges) saw value in our business and chose us,” Sugiyama said after Jeplan’s victory.

“We will review our presentation and hope to bring some impact as Japan’s representative (at the final),” he said.

Judges checked seven criteria, which included the operations team, the business plan, marketability and presentation.

Chief Judge Pina Hirano, who heads Asteria Corp., said it was a close race among the top three competitors.

“(Jeplan’s business) focuses on the global environment, which is and will be an issue on this planet,” indicating the significant scalability of the business that led them to win, said Hirano.

This is the third annual Startup World Cup organized by Silicon Valley-based Fenox Venture Capital. The winner of the final will receive $1 million and its success will raise its profile, which in turn will help to attract investors.

Unifa, a Nagoya-based startup that provides digital-based services to nursery schools to improve efficiency, became the first Startup World Cup champion in 2017.

Seven Dreamers Laboratories Inc., which is developing a robot that automatically folds laundry, advanced to the final last May but lost to Boston-based Leuko Labs Inc.

As this year’s event stressed the importance of collaboration between startups and big companies, the Japan round saw two special awards being offered by Sega Sammy Holdings Inc. and Suntory Holdings Ltd.

Life is Tech Inc., which provides programming tuition to junior high and high-schoolers, won a ¥50 million prize from Sega Sammy, while Kotozna Inc., a translation chat service operator, secured a potential opening to tie-up with Suntory.

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