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Pre-IPOs

Naver Webtoon taps foreign investors ahead of US listing

By Dec 16, 2020 (Gmt+09:00)


Lore Olympus, a megahit webtoon, was created by a US-based artist via Naver's Canvas platform.
Lore Olympus, a megahit webtoon, was created by a US-based artist via Naver's Canvas platform.


Global webtoon (digital comics) platform Naver Webtoon is paving the way to a listing in the US market, reaching out to foreign investors for pre-IPO placement in the range of hundreds of millions of dollars, according to the investment banking industry on Dec. 16.

The South Korean webtoon platform aims to reinforce its global footing ahead of a potential initial public offering in the US, industry sources say. The company has mandated a foreign advisor to handle pre-IPO funding. The stake amount for the pre-IPO placement has not been specified.

Naver Webtoon’s enterprise value is estimated at up to 10 trillion won ($9.1 billion).

“Major venture capital firms in Silicon Valley have expressed their intent to invest in Naver Webtoon,” said an investment banking industry source. “The company is in discussions with firms proposing favorable terms,” the source added.


Naver Webtoon taps foreign investors ahead of US listing


Naver Corp. launched Naver Webtoon in 2004, demonstrating that providing Korean webtoon content via an online platform is a viable business model.

A decade after rolling out the service, Naver tapped into the global market by launching global webtoon service Line Webtoon. Three years later, in 2017, Naver's webtoon division was spun off into a wholly owned subsidiary.

Before the spin-off, Naver poured around 430 billion won ($393 million) into its webtoon operations. This year, the company also conducted a paid-in capital increase worth 90 billion won to further boost Naver Webtoon's operations alongside expanding its presence on overseas platforms.

The investments paid off as Naver Webtoon became the No. 1 webtoon operator in the US, Japan and Korea. Webtoons, previously considered free content, were now profitable by charging for intellectual property rights. 

Naver Webtoon expects to exceed 70 million global monthly active users (MAU) by the end of the year, with a sharp growth curve demonstrated in global markets, primarily in North America.

Naver has been at the forefront of the US market thanks to its level of resource investment there over the past few years. Naver Webtoon surpassed 10 million MAU in the US and posted over 80 billion won in monthly transactions.

Naver is expected to kick off the IPO preparations once the pre-IPO placement is completed. The platform giant has yet to make an official announcement on Naver Webtoon's listing in the US, but industry watchers see it as a fait accompli.

Even the massive overhaul of Naver Webtoon’s governance structure is viewed as a strategic move toward its trading debut in the US.

The company has demonstrated its commitment to the US market by putting its US-based subsidiary Webtoon Entertainment Inc. in charge of global webtoon operations with Korea-based Naver Webtoon and Japan-based Line Digital Frontier under its arm as subsidiaries.

Moving forward, Naver aims to become Asia's Disney by extending its presence from the US to Europe and Latin America.

Write to Chae-yeon Kim at why29@hankyung.com

Danbee Lee edited this article.

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