S.Korean unicorn companies line up for IPOs

Huge sums of money have been flowing into growth sectors globally, prompting South Korean unicorn companies, or non-listed companies with an enterprise value of 1 trillion won ($921 million) or more, to pursue initial public offerings both at home and abroad.

Additionally, the number of local startups edging closer to unicorn status is rising, thanks to the thriving venture capital investment market.

Among 13 unicorn companies in South Korea, seven are preparing for trading debuts this year, according to the Ministry of SMEs and Startups on Jan. 3.

E-commerce giant Coupang Corp. is pushing for a Nasdaq listing, while game developer Krafton Inc., travel platform Yanolja, car-sharing platform Socar Inc., and digital wallet operator Viva Republica Inc. are preparing for listings at home.

The IPO boom among domestic unicorn companies is related to their valuations surging on the back of the COVID-19 outbreak, during which high-tech firms played a pivotal role in the contactless society.

Last year, US-based big data company Palantir Technologies and cloud storage firm Snowflake, alongside Korea-based BTS label Big Hit Entertainment Co. and game publisher Kakao Games Corp., saw their share prices soar upon listing, pushing their enterprise values to more than double.

“Globally, there's more emphasis placed on a company’s growth potential and the value of its intangible assets rather than short-term financial statements,” said a VC official, explaining that the changing trend has encouraged domestic unicorns to go public.

The IPO fever has created fertile ground for the emergence of fresh unicorns. Companies in the limelight as potential unicorns include secondhand marketplace Danggeun Market Inc. and grocery delivery app Kurly Inc., known as Market Kurly.

Danggeun Market, with an enterprise value exceeding 1 trillion won, has risen as the country’s No. 2 e-commerce company with 12 million monthly active users, trailing Coupang.

Market Kurly, credited with popularizing early morning delivery service, raised 200 billion won ($184.2 million) last April, with an enterprise value of 900 billion won. Since then, the company's revenue has soared due to the COVID-19 pandemic driving up the number of users. Its 2020 revenue is expected to double its 428.9 billion won posted in 2019.

Meanwhile, other startups, including cloud technology consulting and management company Bespin Global, real estate app Zigbang Co., multi-channel network Sandbox Network Inc., as well as medical AI software and device companies Lunit Inc. and Vuno Inc., are also eyed as potential unicorns.

Korea's venture capital market exceeded 4 trillion won ($3.7 billion) in both investment and fund amounts for the first time in 2019. Even last year, despite the COVID-19 impact, the VC market is estimated to have again topped 4 trillion won.

So far this year, there are already around 17 VC funds, each with over $92.3 million, set to invest in rising startups.


Write to Jung-hwan Hwang at jung@hankyung.com
Danbee Lee edited this article.