South Korea’s unicorn startups, including Viva Republica, delay IPOs

South Korean startups that exceed $1 billion in valuations, known as unicorns, are pushing back their initial public offering (IPO) dates.

The move comes as liquidity in the startup ecosystem – from the funding rounds to pre-IPO – has dried up amid the global economic downturn that dampened the investor sentiment in the stock market. 

According to industry sources, Viva Republica, the operator of fintech platform Toss, decided to delay its IPO initially planned for next year by 2-3 years. 

A few months ago, the startup was poised to become South Korea’s fourth decacorn or private company backed by VCs with a valuation of over $10 billion.

Viva Republica was hopeful it could raise some 1 trillion won ($766 million) in the pre-IPO round but faced sluggish investor sentiment. 

South Korea’s top online fashion platform Musinsa was widely expected to choose its underwriter in the latter half of this year to go public in the early half of the next. But sources say the company decided to push back the date and will conduct another funding round soon instead. 

South Korea's top travel and accommodation platform Yanolja Co. was known to be aiming for a Nasdaq debut, following the footsteps of e-commerce breakout star Coupang, Inc. 

Back on July 15 last year, SoftBank Group Corp.’s Vision Fund II announced it will invest about $1.7 billion in Yanolja. 

At that time, the booking app operator’s valuation stood at 10 trillion won and the word on the street was that it could skyrocket to as high as 30 trillion won after the IPO. 

Unfortunately for Yanolja and its investors, the company’s valuation has shriveled to hover around 7 trillion won in the curb market.

The worsening investor sentiment is largely due to the slump in the domestic and global stock markets.

“The rosy days of a unicorn startup smoothly attracting investment from the get-go and getting to the IPO are gone, which was the case for the past 3 years,” an investment banker told The Korea Economic Daily. 

The startups that have decided to go through with the IPOs despite the challenging environment have voluntarily lowered their valuations. 

South Korea’s biotechnology startup Voronoi Inc. had temporarily scrapped its plan to go public in March, after only a few institutional investors such as the National Pension Service participated in the startup's book building. Some suggestions matched the company’s floor price but overall participation was too low for the listing to go forward.

During this round of IPO preparations, Voronoi adjusted its market capitalization lower to 500 billion won. 

The figure is a steep plunge from around 700 billion won in market capitalization estimated during the pre-IPO stage last August. 

South Korea’s ridesharing unicorn Socar Inc., which is preparing for an IPO next month, has a market capitalization of 1.1 trillion won, some 200 billion won less than it did in March when it raised capital from Lotte Rental Co. 

Write to Seok-Cheol Choi at dolsoi@hankyung.com
Jee Abbey Lee edited this article.