Korea’s unicorn startups fly high as IPO plans revived

South Korea’s unicorn startups, or venture firms with a corporate value of at least 1 trillion won ($760 million), are poised to return to the initial public offering market with prices of their shares trading high on the over-the-counter (OTC) market.

According to ustockplus.com, a popular online securities trading platform for unlisted Korean stocks, shares of Dunamu Inc., the operator of Upbit, one of the country’s top cryptocurrency exchanges, were trading on the OTC market with an estimated enterprise value of 4.56 trillion won on Friday, up 61% from 2.82 trillion won three months earlier.

Viva Republica Inc., a fintech unicorn and operator of mobile financial super app Toss, saw its valuation rise 35% to 9.16 trillion won from 6.78 trillion won over the same period.

Shares of beauty device firm APR, which surpassed 1 trillion won in corporate value with a pre-IPO investment from CJ Onstyle – the e-commerce arm of entertainment powerhouse CJ ENM Co. – in June, were valued at 2.76 trillion won on Friday, up 146% from 1.12 trillion won three months earlier.

The value of Bithumb, another major cryptocurrency exchange in Korea, tripled to 262.6 billion won over the same period, while Korea’s largest travel platform Yanolja saw its valuation rise more than 20% in December alone.

RISING STOCK MARKET BOOSTS HOPE FOR IPO REVISITS

Analysts said the rising valuations of those unicorn startups come as Korea’s broader stock market shows signs of improving following remarks by central bankers around the world that years of monetary tightening are nearing an end.

The number of Korean unicorns significantly dropped last year amid high interest rates and deteriorating investor sentiment following the COVID-19 pandemic, with market pundits saying some of the unicorns were “overvalued.”

With the rising domestic bourse, startups, which earlier dropped their IPO plans, are returning to the new share-sale market, enhancing the chances of early-stage investors to recover their investments.

In late December, Viva Republica sent requests for proposals to major brokerage companies to select IPO underwriters with a plan to list on the Korea Exchange later this year or in 2025.

Viva Republica is reviving its plans to go public after pushing back its stock market debut planned for 2023.

Shares of crypto exchange operators are buoyed by the US securities authorities’ approval of the trading of bitcoin exchange-traded funds (ETFs) on the stock exchange.

On Wednesday, the US Securities and Exchange Commission approved the first spot bitcoin ETFs in a watershed moment that cryptocurrency enthusiasts are betting will draw new retail and institutional investors into the market.

Write to Eun-Yi Ko at koko@hankyung.com

In-Soo Nam edited this article.