Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Private Capital Markets

Happy New Year! In this report, we discuss 11 unicorns and 14 pre-unicorns in Korea. While the 11 unicorns are all fast, rising players, Coupang, Krafton, Viva Republica, Woowa Brothers, Jipiclub, and Musinsa have been attracting more attention due to their bigger potential. The industry breakdown is relatively well diversified, among E-commerce, fintech, cosmetics, healthcare, games, and delivery. <div class="content-highlight">The 14 pre-unicorns refer to companies that have yet to reach the unicorn status but have recently been designated by the Korean Ministry of SMEs and Startups (MSS) as companies that have excellent potential to become the next unicorns. Some of the very interesting pre-unicorns include Rainist (Bank Salad), Riiid, Smartstudy (Pinkfong), Styleshare, and OTD Corporation.</div>

Happy New Year! In this report, we discuss 11 unicorns and 14 pre-unicorns in Korea. While the 11 unicorns are all fast, rising players, Coupang, Krafton, Viva Republica, Woowa Brothers, Jipiclub, and Musinsa have been attracting more attention due to their bigger potential. The industry breakdown is relatively well diversified, among E-commerce, fintech, cosmetics, healthcare, games, and delivery. The 14 pre-unicorns refer to companies that have yet to reach the unicorn status but have recently been designated by the Korean Ministry of SMEs and Startups (MSS) as companies that have excellent potential to become the next unicorns. Some of the very interesting pre-unicorns include Rainist (Bank Salad), Riiid, Smartstudy (Pinkfong), Styleshare, and OTD Corporation.

In this report, we provide a detailed update on Coupang, which is the largest E-commerce company and a chief rival of <a href="https://www.smartkarma.com/entities/e-mart-inc" target="_blank" data-smartkarma-citation="entities:6993:1" rel="noopener">E Mart Inc (139480 KS)</a>. Coupang has received the biggest amount of funding among all Korean companies from Softbank, which has so far invested 3.4 trillion won ($3.0 billion) in the company in the past four years (since the first investment of $1 billion announcement in June 2015).
In this same period, Emart's market cap has declined more than 3.0 trillion won. This is a reflection of the huge amount of excessive competition in the Korean e-commerce/retail hypermarkets and supermarkets industry with Coupang leading the way in driving down the retail product prices even further.
It is estimated that Softbank has about 60% stake in Coupang whose cash burn rate was about 71 billion won per month in 2018. It had 803 billion won in cash and short term investments at end of 2018. Most recently in 2018, Coupang was valued at about <a href="https://techcrunch.com/2018/11/20/coupang-raises-2-billion-from-softbanks-vision-fund/" target="_blank" rel="noopener">$9 billion </a> with $2 billion investment from the Softbank Vision Fund. Although we do not have the company's financials in 2019, we estimate that its cash burn rate is close to 60 billion won to 80 billion won per month in 2019. Coupang is not likely to have much cash on its balance sheet towards the end of 2Q 2020. Therefore, it faces three difficult scenarios including:
<ul>
<li>IPO</li>
<li>Strategic sale</li>
<li>Additional capital infusion from Softbank or other major investors. </li>
</ul>

In this report, we provide a detailed update on Coupang, which is the largest E-commerce company and a chief rival of E Mart Inc (139480 KS). Coupang has received the biggest amount of funding among all Korean companies from Softbank, which has so far invested 3.4 trillion won ($3.0 billion) in the company in the past four years (since the first investment of $1 billion announcement in June 2015).
In this same period, Emart's market cap has declined more than 3.0 trillion won. This is a reflection of the huge amount of excessive competition in the Korean e-commerce/retail hypermarkets and supermarkets industry with Coupang leading the way in driving down the retail product prices even further.
It is estimated that Softbank has about 60% stake in Coupang whose cash burn rate was about 71 billion won per month in 2018. It had 803 billion won in cash and short term investments at end of 2018. Most recently in 2018, Coupang was valued at about $9 billion  with $2 billion investment from the Softbank Vision Fund. Although we do not have the company's financials in 2019, we estimate that its cash burn rate is close to 60 billion won to 80 billion won per month in 2019. Coupang is not likely to have much cash on its balance sheet towards the end of 2Q 2020. Therefore, it faces three difficult scenarios including:

IPO
Strategic sale
Additional capital infusion from Softbank or other major investors. 


Coupang - What's Next? An IPO, M&A, or Another Capital Infusion from Softbank?

South Korea

Coupang, Inc. operates as an e-commerce company. The Company offers dynamic end-to-end e-commerce and logistic solutions. Coupang serves customers worldwide.

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Coupang (CPNG US)

11 Unicorns & 14 Pre-Unicorns in Korea

Happy New Year! In this report, we discuss 11 unicorns and 14 pre-unicorns in Korea. While the 11 unicorns are all fast, rising players, Coupang,...

Douglas Kim

Coupang - What's Next? An IPO, M&A, or Another Capital Infusion from Softbank?

In this report, we provide a detailed update on Coupang, which is the largest E-commerce company and a chief rival of E Mart Inc (139480 KS)....

Douglas Kim

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