Creating thriving local economies: Onigilly Case Study

How Koji Kanematsu grew Onigilly from a farmers market stand into a regional chain poised for national expansion.

ICA is thrilled to announce the exit of our investment in Onigilly, a Bay Area-grown onigiri chain with 11 locations (four under construction) and plans for expansion across the West Coast. Founder Koji Kanematsu has built a thriving local business, but it wasn't easy - from the early days of scaling up from a food cart, to navigating pandemic disruptions right after taking on major investment. Through his determination, and with support from ICA and partners in our ecosystem, the business is thriving today. Now, after nearly twenty years of building the company, he has now brought in a major restaurant group as Onigilly's majority investor. With the partnership in place, Onigilly is entering a new chapter as part of the larger group, working to make the dream of nationwide expansion a reality.

Onigilly reflects ICA's investment philosophy: back local founders building great businesses that create quality jobs, and partner with them over the long term. The transaction marks ICA Fund's second liquidity event. The return allows ICA to recycle capital into the next generation of promising entrepreneurs, continuing a cycle of backing founders, growing businesses, creating jobs, and strengthening local economies.

Origins of a mission-driven brand

Koji Kanematsu didn't start out with the intention to build a restaurant company. After beginning his career in Japan's technology sector, he moved to San Francisco to build software startups. He found himself eating the same unhealthy fast-food lunches every day, and he missed Japan's culture of healthy, convenient foods. Affordable, portable, nutritious, and deeply nostalgic for many Japanese people, onigiri - rice triangles stuffed with savory fillings - represented everything he wished fast food could be.

Inspired by Subway's assembly-line model and driven by a mission to introduce healthier Japanese food to American consumers, Koji's vision extended beyond a single restaurant from the start.

He started with farmers markets before receiving support from local kitchen incubator, La Cocina, and in 2013, from ICA Fund through our Path to Cash program and later the inaugural Good Jobs Accelerator.

"One thing that's unique about the Bay Area is the culture of support," he said. "As an immigrant with no credit history, organizations like La Cocina, Opportunity Fund, TMC Community Capital, and ICA Fund each helped us at different stages."

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Iterating to find a scalable model for expansion

Over the next several years, Koji treated each new location as an opportunity to refine the business model and build a loyal customer base. After opening his first brick-and-mortar restaurant in San Francisco's Financial District, he built one location with a large kitchen and three prototype stores within the district to test his supply chain, with fillings prepared centrally and each store assembling fresh onigiri to order. The model was designed to support future expansion.

The first to invest and the catalyst for future capital

By the time ICA invested in 2018, Onigilly had demonstrated demand for its concept and built the operational foundation needed to pursue larger-scale growth.

As Onigilly's first institutional investor, ICA helped the company navigate its first formal due diligence process, introducing a level of financial rigor that differed significantly from its earlier angel investments. The following year, Onigilly raised additional capital from a major investor.

"When we started talking to bigger investors, we were ready," Koji said. "ICA's diligence process was actually more detailed than the next investor's. Because we'd already gone through it, we had confidence going into every meeting."

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Founder's persistence tested during COVID-era disruptions

Shortly after raising institutional capital and hiring an experienced executive team to accelerate momentum, COVID-19 brought the company's plans to an abrupt halt. Multiple locations were forced to shut down, and years of planning suddenly shifted toward survival.

Koji refused to abandon the company's long-term vision, even as the business shifted repeatedly to survive. "We lost a lot of money over those three years. But we kept adapting-ghost kitchens, new menu concepts, online sales-and we were finally able to return to growth," he recalled.

In 2023, the company began opening new locations again and introduced a menu concept that paired its traditional onigiri with fresh, sushi-inspired fillings, a learning that came out of the COVID-era pivots. These changes helped restore profitability and allowed Koji to return to his 2019 growth plan. Rather than raising another institutional round, Onigilly invested in building a franchising platform and signed its first franchise agreements within a few months.

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Expanding the vision through partnership

At a franchise trade show, a prospective investor introduced himself to Koji. At first, Koji wasn't interested. Then he discovered that the prospective investor had built one of Japan's most successful restaurant organizations - and, remarkably, was the entrepreneur whose story had inspired him to start Onigilly nearly two decades earlier.

Over several visits in San Francisco and Japan, the relationship evolved into a shared vision for the future of the company. Koji saw firsthand the organization's manufacturing, supply chain and restaurant operations, as well as its long-term investment in social impact. He came to see the partnership as an opportunity to accelerate Onigilly's mission beyond what the company could accomplish independently.

The resulting majority investment gives Onigilly significantly greater operational resources to pursue its national ambitions, bringing together the foundation Koji built with the broader group's operational resources and experience.

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A meaningful transition

For ICA, the transaction represents the successful culmination of an over decade-long relationship, from early business advising to first institutional capital to a successful liquidity event that demonstrates the long-term value of patient, mission-driven investment.

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For Koji, the transaction marks an important transition after nearly 20 years of building Onigilly from the ground up. As the company becomes part of a major restaurant group, the foundation, mission, and vision he built will carry into its next chapter, with the shared goal of bringing Onigilly to more communities across the country.