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[Exclusive] M&As

Naver to acquire 20% of Cafe24 to strengthen e-commerce presence

With the stake purchase, Naver will become Cafe24’s largest shareholder, paving the way for overseas expansion

By Aug 09, 2021 (Gmt+09:00)

Naver is aggressive with M&A efforts
Naver is aggressive with M&A efforts

Naver Corp., South Korea’s top online portal, is set to acquire 20% of Cafe24, a Seoul-based global e-commerce solutions provider, to expand its presence in the global online shopping platform market.

With the stake, estimated at between 150 billion won and 200 billion won ($131 million-$175 million), Naver will become Cafe24’s largest shareholder, although the stake purchase doesn’t include the management right of the startup, according to investment banking sources on Aug. 8. Cafe24 will likely issue new shares for the stake sale.

“The founder of Cafe24 wants to keep the management right of the firm for now. Naver is considering taking over the management control over the long term,” a source told The Korea Economic Daily.

Both sides are expected sign a sale and purchase agreement as early as this week, according to the sources.

Founded in 1999, Cafe24 offers a variety of e-commerce solutions, including online shopping mall designing, launching, operating and marketing. Since its establishment, the company has focused on overseas markets, starting with China in 2008 and later expanding into North America and Southeast Asia.

It has also formed partnerships with Google, Facebook, Baidu, Yahoo! Japan and other channels across the world for its e-commerce solutions services.

With some 1.9 million subscribers, including individuals and corporate clients, to its services, Cafe24 posted 8.4 billion won in operating profit on revenue of 247.3 billion won last year.

“The takeover of a controlling stake in Cafe24 will create significant synergy for Naver, which is serious about becoming a global e-commerce leader,” said an industry official.

E-commerce is growing rapidly.
E-commerce is growing rapidly.


Already a strong player in e-commerce and mobile apps in Korea, Naver has been actively seeking growth opportunities abroad.

Earlier this year, the platform giant invested €115 million in Wallapop, a Spanish virtual marketplace, to gain a foothold in the growing European e-commerce market.

Naver, the company behind Asian messaging giant Line, among other digital properties, has also invested in other Southeast Asian e-commerce platforms.

In March 2020, Naver, with its subsidiary Line Corp., invested over $10 million into the Malaysia-based online shopping platform iPrice through a growth fund it set up with Mirae Asset Securities Co.

In September last year, the fund committed $80 million to Singapore-based startup Carousell, a marketplace platform for used goods. The platform is offered in seven languages, including Malaysian, Indonesian and Tagalog.

Other investments include stake acquisitions in Indonesia-based e-commerce platform Bukalapak and grocery platform HappyFresh.


Cafe24, established by Chief Executive and founder Lee Jae-suk and college friend Woo Chang-gyun and others at Pohang University of Science and Technology (POSTECH), is one of Korea’s first-generation startups.

Initially focused on online community and chatting services, the platform began delving into e-commerce solutions services in the early 2000s.

Cafe24 CEO and founder Lee Jae-suk
Cafe24 CEO and founder Lee Jae-suk

Its revenue has grown from around 10 billion won in the early 2000s to 247.3 billion won in 2020.

In 2018, Cafe24 debuted on the tech-heavy Kosdaq market under the so-called “Tesla Rules,” a loosened initial public offering (IPO) requirement that allows promising but loss-making startups to go public in certain circumstances.

Currently, Woo Chang-gyun, an executive director at Cafe24, is the largest shareholder of the platform with a 10.73% stake, followed by founder Lee at 7.78%.

Naver has been running its own e-commerce solutions platform, Smart Store, in Korea since 2014.

With some 450,000 clients, its Smart Store service could benefit from the economies of scale once it acquires Cafe24, industry officials said.

Naver plans to take its Smart Store to Japan by the end of this year and to Spain after that.

Cafe24, which already has offices in China, Japan, Taiwan, Vietnam and the Philippines, plans to launch offices in India and Europe in the near future.

Write to Min-Ki Koo and Chae-Yeon Kim at

In-Soo Nam edited this article.

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