Home Makeovers Help 33-Year-Old’s Korean Startup Triple Sales
(Bloomberg) -- When Lee Seungjae created his one-stop home decor mobile app in 2013, many people, including his friends, were doubtful the idea would take off.
“There were no precedents,” Lee said, recalling how he first started the business with just 5 million won ($4,500). But “we had a mission. We started the service to solve a problem, which was to make it easy and enjoyable when people want to change something with their home.”
Eight years and 15 million downloads later, the Ohouse mobile app -- featuring a slick digital magazine look, interactive online community and easy one-click shopping -- has become South Korea’s most popular internet platform for home decor. Its growth has accelerated with the pandemic, which drove a spike in online spending on furniture and interior design as social distancing measures forced people to spend more time at home.
In 2020, its users rang up 1 trillion won in annual transactions, triple the previous year. Lee forecast the transactions to double this year, pushing the company’s annual revenue to more than 140 billion won.
That growth is fueling the 33-year-old Lee’s ambitions of turning Bucketplace Co., the company behind Ohouse, into a unicorn in the “near future.” The Seoul-based startup raised about $70 million in November from investors including Silicon Valley venture capitalist Mary Meeker’s Bond Capital that valued it at around $728 million, according to a local media report. Other backers of the company include IMM Investment, Mirae Asset Venture Investment and Naver Corp.
Bucketplace could seek new funding within the next two years, which could see it attain a $1 billion valuation, said Lee, its chief executive, in a video interview. While the company doesn’t have a time frame for going public at the moment, he didn’t rule it out, saying he would consider an IPO in several years “if necessary.”
Lee, who has a bachelor’s degree in chemical and biological engineering at Seoul National University, is one of a small but growing number of entrepreneurs in South Korea tapping into the country’s deep and tech-savvy market.
Before creating Bucketplace in 2013, he was an early member of another startup founded by his friends, where he was put in charge of furnishing a small office on a tight budget. During that process, he faced a myriad of challenges from finding design ideas to getting good deals for desks and chairs. Later, a visit to a friend’s Pinterest-like home in Seoul inspired Lee to create his interiors business.
“My soul and body became dominated by the idea of houses” that day, he said.
Since then, the startup has benefited from a shift in South Koreans’ attitudes to decorating their homes. In 2018, the government passed a law reducing what used to be among the world’s longest working hours, prompting people to take a greater interest in using their houses as a gym, cafe and office.
That trend accelerated during the pandemic as more individuals were forced to spend even more time entertaining and working from home. According to Statistics Korea, household spending on home furnishings and lighting rose 16% in the third quarter of 2020 from a year earlier, even as overall spending in the country declined 1%. Spending on home appliances jumped 34% during the same period.
It’s tapping on a growing trend of merging e-commerce with social networking, a one-stop model popularized by Tencent Holdings Ltd.’s WeChat in China and South Korea’s KaKao Talk. Users are able to compare and read reviews of featured products, see how they’re displayed in other users’ homes and make purchases, all without leaving the app.
The company’s success at home is prompting its backers to consider expanding the business.
“Its main business is in South Korea but there are not many countries with a strong services on home furnishing and interior designs,” said Lee Taekkyung, representative partner at Mashup Angels, a seed investor who first bankrolled Ohouse in 2014. “It has enough potential to go global in the long run. At that point, it could go public.”
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