Unprofitable Korean online mall Coupang plans to go public

Business | 9 Jan 2020 9:43 am

South Korean e-commerce giant Coupang Corp. is preparing for an initial public offering in 2021, according to people with knowledge of the matter, Bloomberg reports.

The Seoul-based company, founded in 2010 by Chief Executive, Bom Kim, and said to be valued at US$9 billion in late 2018, has begun working on tax structuring among other changes as it eyes a public listing next year, said one of the people, who requested anonymity because the matter is private. A company representative declined to comment.

Last month, Coupang -- whose investors include SoftBank Group Corp.’s Vision Fund, BlackRock Inc. and Sequoia Capital -- appointed Alberto Fornaro as chief financial officer to succeed Richard Song. Earlier in 2019, it hired Jay Jorgensen, a former Walmart Inc. executive, as general counsel and chief compliance officer.

SoftBank’s shares were up by 3.8 percent in Tokyo in the wake of the news.

In November 2018, the Vision Fund invested US$2 billion in the company in a deal that valued Coupang at US$9 billion, people familiar with the matter said at the time. That funding followed US$1 billion from SoftBank itself in 2015, valuing the start-up at about US$5 billion.

Korea’s e-commerce market is the fifth-largest in the world and on track to be the third-largest by 2021, behind only China and the U.S., according to Coupang.

Coupang had more than US$10 billion in gross merchandise value on its platform as of December 31, according to a person familiar with the company. Sales increased by more than 60 percent year over year in 2019, the person said.

Kim, a Harvard University dropout, had mulled an IPO a few years ago, he told CNBC in December, but opted instead to expand the business with a nationwide fast delivery network.

In spite of intense competition from EBay Inc.’s Gmarket and family-run conglomerates such as Shinsegae Inc. and Lotte, Coupang has successfully expanded its shopping and delivery services with SoftBank’s investment.

Though still unprofitable, Coupang has been pushing a growth narrative when talking to investors and in the summer it launched Coupang Eats as an extension of its delivery services. When South Korea’s biggest food delivery app Woowa Brothers Corp. sold an 87 percent stake to Delivery Hero SE, it alluded to Coupang Eats as a strong challenger. 

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