$ 7 billion fintech super app plans 12-fold growth and IPO by 2025

(MENAFN – Gulf Times) Viva Republica Inc, operator of South Korea’s largest fintech startup, Toss, has raised over $ 400 million worth $ 7.4 billion to help the super app to multiply its sales by 12 by 2025 as it moves towards a potential initial audience offering.
The Seoul-based startup has raised $ 410 million, more than half of which comes from foreign investors including Alkeon Capital Management and Altos Ventures, founder and CEO Lee Seung-gun said in an interview. The state-run Korea Development Bank injected 100 billion won into the cycle. He plans another round of fundraising in the first half of 2022 which will be the largest ever and the last before the startup seeks an IPO in the next five years.
Toss is one of a handful of global companies like Ant Group Co and Grab Holdings Inc that are shaking up traditional financial services with all-in-one digital platforms that offer insurance, payments, credit scoring, and even securities trading. It plans to launch an online lender as early as September, after receiving South Korea’s third online banking license earlier this month. That, along with other services like its fast-growing headlines platform, will help Toss double its monthly users to 20 million and increase revenue to 5 billion won by 2025, a significant jump from around 400 billion won in 2020, according to Lee.
“We are on the cusp of the great transition from traditional finance to online finance,” said the 39-year-old founder. “We have prepared so hard and now is the time to enjoy the thrills on the roller coaster. “
With the latest funding, Toss has become South Korea’s second most valuable startup, behind PUBG creator Krafton Inc, which this month filed an IPO that will likely be the largest on record in South Korea. . But unlike the game maker, the fintech company and its backers – a list that includes GIC Pte, Sequoia China, and PayPal Holdings Inc – are in no rush to float, Lee said.
“Our investors believe Toss will eventually become a $ 100 billion company, so they’re not rushing for an exit or an IPO,” Lee said. At this time, we are not preparing or reviewing an IPO, but will list our shares within 3 to 5 years. Nothing has been decided on the destinations for the list, but we are open to options, including listings in the US or Korea.
Toss’s success means Lee, a former dentist whose previous eight businesses failed, is set to join a growing list of billionaires in South Korea. His stake in the startup, roughly in his teens, is estimated at over $ 1 billion with the latest valuation of $ 7.4 billion. He also follows other self-made tech entrepreneurs by investing in early stage startups and said he wanted to use technological innovation to solve major issues ranging from hygiene to finance to climate change. and food.
“The wealth map is being revamped,” said Lee, who is known to spend frequent sleepless nights in the office and mentor junior founders in his spare time. It’s a pleasure to see that the risks the founders took are paying off. I would be happy even if my juniors later pushed me off the rich list.
Toss, which reduced its losses by 37% to 72.5 billion won in 2020, will use the funds for new companies such as Toss Bank and Toss Securities as well as for expansion in Southeast Asia, Lee said. . Already in Vietnam, it aims to enter most countries in the region within two years.
Toss Securities officially opened its mobile trading system in March, seeking to take advantage of a resurgence in retail investment in the country. In the first month, it amassed 2 million users – a milestone that took Robinhood Markets Inc for two years – after a popular promotion where it distributed a random slice of South Korean companies. Three months later, it has attracted 3.5 million users and hopes to reach 5 million by the end of this year as it aims to overtake Kiwoom Securities to become the country’s largest securities app in terms of ‘users.
The stupendous growth was mainly driven by users in their 20s and 30s as a combination of easy money and free time during the pandemic led to a Korean retail boom. In 2020, the number of people under the age of 40 who held securities accounts more than doubled to nearly 3.2 million, according to data from Korea Securities Depository, while the amount of securities held by young people increased. increased by 98%.
“There will be no going back to the front-Covid,” Lee said. Amid low interest rates and a slow growing economy, people are struggling to make money through investments and the trends will not change. They have already experienced convenient online services during the pandemic and it is difficult to turn back the clock. “
Toss plans to further expand its securities trading service next quarter by adding U.S. stocks and ETF trades, which are increasingly popular among Korean retail investors. It also plans to offer margin trading and automated advisory services in the first half of next year.
Toss Bank, the final piece of the startup’s financial super-app puzzle, also expects the switch to online services during the pandemic to help it compete with traditional incumbents like KB Financial Group Inc as well. than Internet-only rivals such as Kakao Bank. About 23% of loans in Korea were made through online lenders last year, up from 13% in 2019 and 8% in 2018, Lee said.
Competition in digital loans and payments is intensifying in South Korea. With easy access to hundreds of millions of people using Korean internet giant Kakao Corp.’s messaging service, Kakao Bank and Kakao Pay have grown rapidly and plan to go public this year. Another rival, K Bank – which recently amassed new users in the crypto space – is looking to raise 1.2 billion won from shareholders, including Bain Capital, to grow its business.


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