Japanese Crowdfunding Platform Ubugoe Faces Payment Crisis After Withholding Funds

The Japanese crowdfunding platform Ubugoe has failed to pay out more than 65 million yen (approximately €378,000) from successful campaigns to railway companies, game developers, and event organizers. More than 5,000 backers had contributed funds to projects, but several recipients have been waiting for months for a large portion of the proceeds.

Ubugoe has operated its platform since 2021

The company did not charge project creators a fee for publishing their campaigns and financed itself through additional fees from supporters. The website has been inaccessible since April 15th. Ubugoe initially stated that the server had crashed, and on June 23rd announced that the company was relocating its address and server.

Four railway companies are waiting for their money from the crowdfunding platform
The companies affected are Yamagata Railway in Yamagata Prefecture, Hokuetsu Express in Niigata, Nagaragawa Railway in Gifu, and Konan Tetsudo in Aomori. Between July 2025 and February 2026, the four regional railway companies raised funds for train driver training, a themed train, the introduction of new rolling stock, and the repair of a locomotive.

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All four campaigns exceeded their funding goals. The Yamagata Railway raised three times the planned amount. In total, 1,191 people supported the four companies’ projects with more than 20 million yen (approximately 116,000 euros).

In return, the railway companies promised guided tours of depots, tickets for night trains, naming rights for a station, and commemorative items. This is a form of purchase-based crowdfunding. Supporters pay for a promised good or service, while the platform receives the money and is supposed to transfer it to the project operator after the campaign ends.

Ubugoe paid the four companies almost nothing

Yamagata Railway stated that it did not receive the majority of the revenue. The other three railway companies received no money at all. In mid-June, Ubugoe promised Nagaragawa Railway that it would transfer the outstanding sum in monthly installments of 500,000 yen (approximately €2,900) starting at the end of June, but the payment never arrived. Nagaragawa Railway made the case public in June. “We are sorry that the feelings of the people who supported us did not reach us,” the company stated.

The four railway companies are delivering the promised services despite the lack of revenue and are covering the costs from their own funds. The project operators remain responsible for the services provided to the supporters, even though Ubugoe retains the money collected for this purpose.

Japan’s regional railways have hardly any financial reserves

The outstanding payments are hitting companies that can no longer finance their routes from their own revenue. In fiscal year 2023, 80 of Japan’s 96 regional railway companies posted losses. That’s roughly 83 percent.

Regional trains outside major cities transport, among others, students, commuters, and senior citizens. Due to the aging and shrinking population, passenger numbers are declining on many routes. Repairs, driver training, and special tourist trains are intended to ensure continued operation or attract additional passengers.

The four railway companies used crowdfunding for expenses they couldn’t fully cover from their regular income. Due to the missed payments, they now have to pre-finance the promised trips, events, and commemorative items.

Game developers are also reporting payment defaults

The known problems date back to September 2025. A campaign for the live-action video game “Shibuya Scramble Stories” raised a total of 54.75 million yen (approximately €318,000) between May and July 2025. Ubugoe initially stated that the money had been mistakenly transferred to another business partner.

Following negotiations with a lawyer, the company signed an agreement for full repayment and made several partial payments. The last known payment of one million yen (approximately €5,800) was made on November 21, 2025. This left an outstanding balance of 27.75 million yen (approximately €161,000).

The developer of the game “Purgatory Blue” also stated that he received none of the 10.94 million yen (approximately €64,000) collected. In May 2026, the operator announced that he had initiated proceedings with the Shibuya police to file a criminal complaint against Ubugoe and its president. It is unknown whether the police accepted the complaint and opened an investigation.

Court orders Ubugoe to pay

A campaign for the “Nagoya Mirai Festival 2026” raised a total of 8.7 million yen (approximately €51,000) from 415 supporters between November and December 2025. The funding goal had been 6.5 million yen (approximately €38,000).

Ubugoe failed to transfer the revenue to the organization hosting the festival. The organization subsequently sued the company. In June 2026, the Tokyo District Court ordered Ubugoe to pay the outstanding amount plus interest.

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(Featured image by Fikri Raysad via Unsplash)

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First published in Sumikai. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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