South Korean Unicorns Spark Interest in IPOs

Private investors have contributed historic amounts of cash to South Korean startups that have moved on to unicorn status — startups valued at over $1 billion — which have doubled in number since 2018, Reuters reported on Wednesday (Dec. 22).

The current environment could be the perfect situation for additional epic stock market listings like Coupang’s $4.6 billion initial public offering (IPO), which closed its first day of trading on March 11 at $49.25, up $ 40.7%. The target range was $32 to $34 per share, with an offering price of $35. Shares opened at $63.50, PYMNTS reported.

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Online grocery service Market Kurly was valued at 4 trillion won ($3.36 trillion) before announcing its plans to go public in 2022 and after raising 250 billion won ($210 billion) from Anchor Equity Partners. Kurly is one of more than 15 unicorns in South Korea.

Seoul’s IPO market is among the most bustling worldwide. Although China and India have more unicorns, the fast pace of investments in Korean startups have not gone unnoticed, compelling bankers to eye more firms as conceivable IPO contenders.

Read more: Grocery Startup Kurly Seeks $5.9B Valuation After IPO

“The interest in Korean unicorns has taken off this year, and not only in terms of fundraising,” David Chung, head of investment banking at Goldman Sachs in Korea, told Reuters.

“[That] many more businesses maturing and gaining momentum at a faster rate are facts which are getting more global notice following the marked success of the trailblazers in 2021,” Chung said.

In the third quarter of this year, venture capitalists invested an estimated 2.07 trillion won ($1.74 trillion), the largest quarterly amount since 1986 when data collection began. That figure is two-thirds higher than the same period last year, according to data from the Korean Ministry of SMEs and Startups.

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Total venture capital investment in startups this year reached 5.26 trillion won ($4.42 trillion) compared to the previous high of 4.3 trillion won ($3.61 trillion) in 2020.

Some 66% of the South Korean unicorns are platform businesses, including Viva Republica, Wemakeprice, Musinsa and Market Kurly. Investor interest is anticipated to focus on those areas in 2022.