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Venture capital

Buzzvil eyes unicorn status with ad platform

Apr 01, 2020 (Gmt+09:00)

Reading the biographical novel of nuclear physicist Lee Whi-so made his heart beat. "I, too, want to be a creator of something that will change the world," he thought.

His parents lent him a room as a workshop to explore his creativity and curiosity. They even brought to life a blueprint he drew on a sketchbook. He ended up burning up a pot to make mold for his invention by melting down lead from fishing rods. His parents played a huge role in helping him, at the time an elementary student, win the President's Award in the 1996 invention content hosted by the patent office.

He is now a four-time startup founder with two successful exits. He's rung up more than 35 billion won in revenue in 30 some countries. This is the story of Lee Kwan-woo, 36, founder of advertising platform startup Buzzvil.

Buzzvil is one of next-generation unicorns (companies valued at over 1 trillion won) selected by the venture capital industry.
Inventor child becomes serial entrepreneur

Buzzvil was founded in 2012. It became famous for its mobile lock-screen advertising service. It recently began expanding into the general mobile advertising market. Every time users click on an ad, they receive points provided by advertisers. The service has been well-received as consumers favor points from major membership rewards programs like OKCashbag.

Lee's first business item was based on barcode technology. While in undergrad, he pondered the idea of sticking barcodes on frozen meals so that the microwave can automatically read the barcodes and cook accordingly. Lee sold this business item to Naver in 2009 for 3.5 billion won. This was his first exit.

Lee then moved on to Postwing, a copyright management solution business, and then inroduced Dailypick, which sells restaurant discount coupons, in 2010. Dailypick also hit jackpot. As consumers familiar with social commerce continued to grow, Ticketmonster bought up his company for 10 billion won.

The next item that caught Lee's attention was advertising. Lee began by placing ads on mobile lock-screens. He soon differentiated his business from other competitors by providing points from advertisers. He targeted overseas markets at the same time by entering Japan in 2013 and Taiwan in 2014. In 2016, he ramped up the company size by taking up Slidejoy in the U.S. He also bought Slide, the No. 1 lock-screen app in Pakistan.

buzzvill_ceo
Lee Kwan-woo, a rare domestic serial entrepreneur, speaks about advertising platform Buzzvil, his four start-up that grants points to users. / Courtesy of Buzzvil


 

Transformation into a rewards-based ad platform

 As the company continued to cruise on lock-screen ads, a roadblock hit in October 2017. Google began prohibiting profits by placing lock-screen ads through modules. It basically meant ads were banned on apps unless they were specifically designed as a lock-screen app. This dealt a direct blow to Buzzvil, which was planning to scale up its successful lock-screen ad business.

Google gave two months. Buzzvil began targeting major points companies. The last resort idea that came up was to combine a module that enabled rewards-based ads into any given points company's app. "Before, consumers only had to download the lock-screen app, but we were challenged to convince consumers to download the points company app as well,'' said Lee. "I'm laughing as I reminisce now, but at the time, I was walking on thin ice."

Users familiar with Buzzvil's rewards were surprisingly loyal. After an initial slowdown after Google's new policy took effect in 2018, Buzzvil shot back up in speed toward the end of the year. Machine learning-based technology proved to deliver strong results as it specifically targeted users all the way through checkout. "When we compare rewards versus non-rewards ads from major commerce companies last year, we can see more than double the difference in ad profits and a 3.3 times difference in conversion rates," Lee explained.

Buzzvil's new goal is territorial expansion. It plans to introduce rewards in Instagram, Facebook and other social networking service ads. To power this growth, it recently raked in 20.5 billion won in investment from Mega-7 Club, a co-investing group comprised of Korea Development Bank, LB Investment and four other venture capital firms to foster unicorn companies.

What kind of exit is Lee dreaming of next?

"My priority is to nurture Buzzvil into Korean-born global firm," he said. "I'm evaluated as a successful entrepreneur with two solid exits, but they were all short-term. In this round, I'm all about showing off the "spicy power" of a Korean firm in the global market."

By Suyoung Jo delinews@hankyung.com

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