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Venture capital

Sequoia, Hillhouse and DST invest $150 mn in Korean grocery startup

By Apr 04, 2020 (Gmt+09:00)

Sequoia Capital, Hillhouse Capital and DST Global have invested a combined $150 million in South Korea’s online grocery delivery startup Kurly Inc. as the coronavirus pandemic underpins growth prospects for e-commerce business.

The investment was made one year after the three venture capital firms participated in the 135 billion won ($109 million) financing for the fresh food delivery platform, called Market Kurly.

The latest financing valued the Korean startup at around 950 billion won, just shy of the 1 trillion won threshold to reach unicorn status because domestic investors hesitated to join the funding round, according to investment banking sources on April 3.

A surge in online shopping triggered by the Covid-19 outbreak helped the loss-making startup secure the fresh funding.

As a condition for the follow-up investment, however, the foreign investors required that Kurly’s sales reach or top their proposed target, the sources said.

It has raised more than 400 billion won in five funding rounds.

The new funding may calm market speculation about Kurly being an acquisition target by bigger rivals. Domestic retail giants such as Shinsegae Inc. and CJ Corp. had considered buying Kurly but gave up their bid because of price differences.

Kurly has quickly gained market share with the introduction of dawn delivery service in 2015.

But it is in fierce competition with Shinsegae’s online mall and SoftBank-backed Coupang which also adopted the early-hour delivery service.

Losses at Kurly more than doubled to 97.6 billion won in 2019 from a year before, despite a jump in sales that nearly trebled to 430 billion won. also posted losses in 2019, with Coupang expected to report a rise in shortfalls

“As competition in the fresh food delivery market is becoming fierce, Kurly has fallen short of expectations compared to its early stage. But its strong brand is the most appealing factor for investors,” one of the sources told the Korean Investors.

Separately, Sequoia and China’s Hillhouse Capital had reaped handsome returns from their investment in South Korea’s top food delivery app operator Woowa Brothers, in which Germany’s Delivery Hero agreed to buy an 87% stake in 2019.

The two investment firms participated in the $320 million funding for the delivery app company in 2018, along with Singapore’s GIC and other investors.

DST invests in late-stage Internet-based companies, including Facebook, Twitter and WhatsApp.

Write to Chaeyeon Kim and Jung-hwan Hwang at

Yeonhee Kim edited this article

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