Megazone Cloud receives $343 mn from MBK, IMM PE in Series C funding

Megazone Cloud Corp., South Korea’s largest managed cloud service provider (MSP), has completed its Series C funding round with a combined 450 billion won ($343 million) in investment from MBK Partners and IMM Private Equity.

With the latest investment, which comes amid higher interest rates and a lackluster stock market, Megazone Cloud’s enterprise value has risen to 2.4 trillion won, according to investment banking sources on Tuesday.

North Asia-focused MBK has injected 250 billion won, part of its second special situations fund, MBK Partners SSF II, while IMM PE, a Seoul-based investment company, chipped in with 200 billion won.

MBK and IMM PE will each have stakes in Megazone Cloud in the mid-10% range following their investment.

In February, KT Corp., Korea’s second-largest telecom operator, invested 130 billion won in Megazone for an 8% stake as part of the cloud firm’s Series C funding round.

The investments by KT, MBK and IMM PE – the largest-ever fundraising for a Korean cloud computing firm – helped Megazone Cloud gain unicorn status, or a company with a valuation of over $1 billion.

ON ITS WAY TO 2023 IPO

The startup's corporate value has soared, compared to its valuation of 600 billion won in June of last year when it closed its second round of Series B funding.

The company offers cloud service introduction, design, embedment and operation. It has more than 3,700 corporate customers and manages offices in the US, Canada, China, Japan, Hong Kong and Vietnam as well as in Korea.

It came to the spotlight in 2012 when it was picked by Amazon Web Service (AWS) as its first Korean partner.

After splitting off from its parent Megazone Corp. in 2018, it received two rounds of funding from outside investors between 2019 and the end of last year.

In Series A funding in 2019, Megazone Cloud received a combined 48 billion won from 23 investors, including state-run Korea Development Bank, Kakao Investment Co. and KT Investment.

In Series B funding from 2020 to 2021, the firm attracted a combined 190 billion won from investors including Salesforce Ventures, global software company Salesforce’s investment arm.

Megazone Cloud is also preparing to go public by the end of 2023.

Last year, the firm selected KB Securities Co. as the bookrunner for an initial public offering on the Korean bourse.

Beyond the leading managed service provider, the company aims to become an integrated digital platform that offers non-fungible tokens (NFTs), artificial intelligence and virtual human services.

Write to Jun-Ho Cha at chacha@hankyung.com
In-Soo Nam edited this article.