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| Market Kurly CEO Sophie Kim / Courtesy of Market Kurly |
Concerns also exist over operating losses
By Kim Bo-eun
All eyes are on grocery delivery service Market Kurly's valuation as it prepares for its listing on the local stock market. The online retailer received a valuation of 4 trillion won ($3.4 billion) in a pre-IPO, via which it secured 250 billion won before its debut on the main KOSPI bourse, slated for the first half of next year.
Its valuation is up 60 percent from July, when it received its sixth "Series F" investment, amounting to 225.4 billion won, backed by expectations over the company's growth potential. Market Kurly's stock received a valuation of 100,000 won per share in the pre-IPO, which compares with the 50,000 won it received at the time of its Series F investment in July.
The company's revenue for 2020 came to 953 billion won, and this year, the figure is set to reach 2 trillion won. Market Kurly said that it isn't immediately considering pursuing an overseas expansion but the platform is expected to make inroads into overseas markets in the coming years.
But concerns exist because the platform has failed to generate a profit in the past five years. It posted operating losses of 12.4 billion won in 2017, 33.7 billion won in 2018, 100.3 billion won in 2019 and 116.2 billion won last year.
Market Kurly's IPO is possible because the Korea Exchange has eased regulations so that even companies in deficit are able to list on the KOSPI if their market capitalization exceeds 1 trillion won. The measure intends to help promising startups get funding.
There is the possibility that an excessive valuation could have Market Kurly follow in Coupang's path. Korea's commerce platform, Coupang, made a splash debut on the New York Stock Exchange in March. The company garnered attention as "Korea's Amazon," with its market capitalization reaching 100 trillion won on the day of its debut, but Coupang's stock now hovers below $30, after peaking at an intra-trading high of $69, as the company continues to post losses.
"E-commerce companies need to invest heavily in infrastructure and human resources during the early stages. We are seeking to switch to making profits as soon as possible. The valuation of the company is determined by the market," a Market Kurly official said about the company's latest valuation.
"The switch will take place when most necessary investments are completed and Market Kurly's loyal customer base expands, as the revenue will outweigh fixed costs for new customers at that point."
