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IPOs

Coupang set to raise $3.6 bn via US listing; eyes throne as platform giant

Mar 02, 2021 (Gmt+09:00)

Coupang set to raise .6 bn via US listing; eyes throne as platform giant

South Korea's e-commerce giant Coupang Corp. is looking to raise up to $3.6 billion via its initial public offering on the New York Stock Exchange -- the fourth-largest listing to date among Asian companies, following PetroChina, China Mobile and Alibaba. 

The company is set to distribute 120 million Class A shares, priced between $27 and $30 apiece, according to the company's filing to the US Securities and Exchange Commission (SEC) on Mar. 2.

Coupang's total market capitalization, based on $30 a share, is expected to reach $51 billion. 

Armed with deep pockets, the company is set to emerge as a strong opponent to Korean platform behemoths, Naver Corp. and Kakao Corp., in a fierce battle to claim the throne as the leading digital platform encompassing shopping, content, logistics and finance.

THREE-WAY RACE TO HEAT UP IN THE PLATFORM SECTOR

Coupang's IPO hints at a reshuffling of Korea's platform landscape, currently dominated by Naver and Kakao. 

The Korean e-commerce company got its start from its online shopping business and rose to success with its signature "bullet-speed delivery" service. But Coupang's ultimate goal is the same as Naver's and Kakao's -- to retain consumers on its platform.

The company is expected to use its IPO proceeds to target logistics, content and food delivery services. Earlier, the company announced plans to invest around 870 billion won ($774 million) to construct fulfillment centers nationwide. 

"Coupang, originally focused on direct buying, is likely to increase the portion of its third-party sales -- similar to the US e-commerce platform Amazon," said a retail industry official. "The company will become a threat to Naver, which operates the e-commerce platform Smart Store," the official said.

Graphics by Jerry Lee
Graphics by Jerry Lee

The content scene is no exception to the foreshadowing competition between the three companies. Coupang is anticipated to jump into the booming webtoon market as it gears up its content business. The company has also plunged into the growing streaming service market, launching a subscription-based video streaming service, Coupang Play.

The company will begin livestreaming English Premier League (EPL) matches on its over-the-top (OTT) service this week.

As Coupang continues to broaden its business portfolio, industry experts say that the three Korean companies going head to head will be inevitable at home and abroad.

COUPANG FOUNDER TO MAINTAIN MANAGEMENT RIGHTS POST-IPO

Coupang disclosed a roster of major shareholders that hold over a 5% stake in the company in the latest SEC filing. The list includes SoftBank Vision Fund with a 39.4% stake; Greenoaks Capital with a 19.8% stake; and Maverick Holdings with a 7.7% stake.

The largest individual shareholder is Greenoaks Capital Founder Neil Mehta, with a 19.8% stake.

Meanwhile, Kim Bom-suk, the founder of Coupang, does not hold any Class A shares. Instead, he holds all of the Class B shares, which get 29 votes per share via the dual-class share structure.

Kim will hold a 76.7% voting interest following the IPO, alongside the option to convert his Class B shares into Class A shares.

Coupang Founder Kim Bom-suk
Coupang Founder Kim Bom-suk

Despite the slim chance of it happening, if Kim actually decides to convert his holdings, then the shareholding structure of the company will change to SoftBank Vision Fund with a 33.1% stake; Greenoaks Capital with a 16.6% stake; Mehta with a 16.6% stake; and Kim with a 10.2% stake.

"Aside from SoftBank Vision Fund, other VC firms also invested for a long period, meaning they're expected to take profit from the IPO," said an investment banking industry official.

Coupang has stipulated a lock-up period of up to 180 days for the company's core executives and employees.

Write to Dong-hui Park and Geun-ho Im at donghuip@hankyung.com

Danbee Lee edited this article.

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