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Korean unicorn Coupang eyeing IPO as early as next year

London

SOUTH Korean e-commerce giant Coupang is preparing for an initial public offering (IPO) as soon as 2021, said people with knowledge of the matter.

The Seoul-based company, founded in 2010 by Bom Kim, its chief executive officer, 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.

The source requested anonymity because the matter is private. The company has declined to comment.

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Last month, Coupang, investors in which include SoftBank Group Corp's Vision Fund, BlackRock and Sequoia Capital, appointed Alberto Fornaro as chief financial officer to succeed Richard Song.

Last year, it hired Jay Jorgensen, a former Walmart executive, as general counsel and chief compliance officer.

SoftBank's shares were up as much as 3.8 per cent 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 startup 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 US, said Coupang.

Coupang had more than US$10 billion in gross merchandise value on its platform as of Dec 31, said a company source.

Sales spiked by more than 60 per cent year over year in 2019, the person said.

Mr 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's Gmarket and family-run conglomerates such as Shinsegae 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.

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 per cent stake to Delivery Hero, it alluded to Coupang Eats as a strong challenger.

"Assuming Coupang lists shares in the US, it might get a conservative valuation as a loss-making unicorn, owing to WeWork's IPO failure," said SK Securities analyst Yoo Seung-woo. BLOOMBERG