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Korean app market One Store to raise $151 mn for Kiwoom's exit

As the financial investor's loan matures at end-2023, it will raise funds again and reattempt IPO

By May 08, 2023 (Gmt+09:00)

2 Min read

A gift card from Korean homegrown app market One Store (Courtesy of SK Square)
A gift card from Korean homegrown app market One Store (Courtesy of SK Square)


One Store Co., a South Korean homegrown app store, is slated to attract more than 200 billion won ($151.3 million) as its 100 billion won loan, which it took out in 2019, matures at the end of this year.

SK Square Co., the app store’s parent company and an investment management arm of Korea’s No. 2 conglomerate SK Group, is in talks with private equity firms over fundraising, according to investment banking sources last week. Lazard Korea Asset Management Co. will act as a financial advisor.  

Making up around 14% of the Korean app market, One Store app is available on the Android operating system and has 50 million total users, including 19 million monthly active users. Transactions on the app store total more than 700 billion won per year.

Its largest shareholder is SK Square with 47.49% ownership, followed by online portal giant Naver Corp.’s 24.97%. The third-largest stakeholder is Kiwoom Pioneer Private Equity, with 17.66%, and manages capital from SKS Private Equity, Kiwoom Investment Co., SK Securities Co. and other local financial services firms.

Telecom giant KT Corp. owns a 2.95% stake, while Microsoft Corp. and mobile carrier LG Uplus Corp. each hold less than 1%.  

LONGER LOAN MATURITY WITH NEW INVESTORS

The new fundraising has been planned for Kiwoom Pioneer’s exit. The financial investor injected 100 billion in 2019 on the condition that the app store would go public within three years, or SK Square would repay the principal with interest to the private equity firm.

Parent company SK Square dropped a plan for an initial public offering in May of the last year as One Store shares failed to draw strong demand from institutional investors. The SK Group investment manager and Kiwoom Pioneer agreed to extend the maturity by a year after the failure of the IPO.

Through fundraising, SK Square will find a new investor for One Store to further extend the maturity and then retry One Store’s IPO, sources said.

SK Square hoped for a 1 trillion won valuation for One Store during the IPO attempt last year. The app market’s operating loss surged by 335.1% to 24.8 billion won in 2022, while revenue rose 4.1% to 222.9 billion won. The app market hasn’t posted any yearly operating profit since its inception in 2016.

One Store will focus on raising value by increasing its number of best-selling games, which normally pay app stores high fees, and expanding in overseas markets.

It forecasts the introduction of some top games will be easier as Korea’s antitrust body fined Alphabet Inc.’s Google LLC and its regional arms 42.1 billion won last month for allegedly abusing its dominant position to interrupt One Store’s business

Write to Jun-Ho Cha and Jong-Kwan Park at chacha@hankyung.com


Jihyun Kim edited this article.

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