3. Joint Venture

In February 2014, the Company entered into an agreement with SunBridge Corporation and Dentsu eMarketing One K.K. (collectively, the Investors) to engage in the investment, organization, management and operation of a Japanese subsidiary (Marketo KK) of the Company that is focused on the sale of the Company's products and services in Japan. The Investors initially contributed approximately $2.0 million (200,000,000 Japanese Yen) in cash in exchange for 35.4% of the outstanding common stock of Marketo KK. Furthermore, under the agreement, the Company and the Investors agreed to subscribe to additional shares by contributing additional funding of approximately $2.0 million (237,480,955 Japanese Yen) and approximately $1.7 million (200,000,000 Japanese Yen), respectively, which occurred in March 2015. As of December 31, 2015, the Company and the Investors owned approximately 60.1% and 39.9% of the outstanding common stock in Marketo KK, respectively.

Twenty percent of the common stock held by the Investors may be callable by the Company or puttable by the Investors beginning on the seventh anniversary of the initial capital contribution by the Investors. This percentage increases to forty percent and one hundred percent on the eighth and tenth anniversary, respectively. Should the call or put option be exercised, the redemption value would be determined based on a prescribed formula derived from the relative revenue of Marketo KK and the Company and may be settled, at the Company's discretion, with Company stock (with no limit on the shares that may be issued) or cash. Additionally, the common stock held by the Investors may be callable or puttable following a change of control of the Company. The redeemable non-controlling interests in Marketo KK are classified outside of permanent equity in the Company's consolidated balance sheet as of December 31, 2015, primarily due to the put right available to the redeemable non-controlling interest holders in the future which may be settled in cash or common stock of the Company. The balance of the redeemable non-controlling interests is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings, or its estimated redemption value. Accordingly, as of December 31, 2015 the Company adjusted the redeemable non-controlling interests to its expected redemption value, resulting in a $4.1 million reduction to additional paid-in-capital for the year ended December 31, 2015.

The following table reconciles net loss and adjustment attributable to redeemable non-controlling interests for periods indicated below (in thousands):

	Redeemable Non-controlling Interests
Balance as of December 31, 2013	$	—
Investment by redeemable non-controlling interests		1,585
Net loss attributable to redeemable non-controlling interests (before adjustment to redeemable non-controlling interests)		(618	)
Foreign currency translation adjustments		(167	)

Balance as of December 31, 2014		800
Investment by redeemable non-controlling interests		1,445
Net loss attributable to redeemable non-controlling interests (before adjustment to redeemable non-controlling interests)		(1,645	)
Foreign currency translation adjustments		(20	)
Adjustment to redeemable non-controlling interests		4,063

Balance as of December 31, 2015	$	4,643