Coupang Files for IPO as South Korea Heads Into Boom Year


South Korean e-commerce giant Coupang Corp. filed for an initial public offering in the U.S. that could raise billions of dollars to battle rivals and kick off a record year for IPOs in the Asian country.

The Seoul-based company revealed a surge in net revenue last year to about $12 billion, almost double the $6.3 billion it made in 2019, according to a prospectus filed with the U.S. Securities and Exchange Commission. It also narrowed losses to a net $474.9 million in 2020, from a loss of about $699 million the year before.

Coupang didn’t specify the planned timing or size for its IPO, but Bloomberg reported earlier the company’s valuation could exceed $30 billion and the offering may come in the second quarter. The company will offer shares on the New York Stock Exchange under the ticker CPNG.

“Coupang has still much room to grow,” said Jungwook Lim, managing partner at the Seoul-based venture capital firm TBT. “With the billions of dollars it will raise from an IPO, Coupang may keep widening the gap from its competitors.”

Founded in 2010 by Chief Executive Officer Bom Kim, Coupang has grown faster than the e-commerce market amid fierce competition from retail conglomerates and startups. It has also aggressively expanded its delivery and logistics businesses.

Coupang Files for IPO as South Korea Heads Into Boom Year

If Coupang’s public offering is successful, it could be another windfall for SoftBank Group Corp. and founder Masayoshi Son. SoftBank invested $1 billion in the company in 2015 and its Vision Fund put in another $2 billion in 2018, pushing its valuation to about $9 billion. The Japanese conglomerate’s stake is about 37% overall, Bloomberg has reported.

Son reported a record $8 billion profit from the Vision Fund in the December quarter, boosting SoftBank’s share price to a two-decade high. The Japanese billionaire has said he wants to take 10 to 20 portfolio companies public each year.

South Korea is going through its own IPO surge, with at least one local financial institution forecasting a record year. In addition to Coupang, Krafton Inc., the games publisher behind PlayerUnknown’s Battlegrounds, or PUBG, plans to go public later this year. The IPO could value the startup at as much as 30 trillion won ($27.2 billion), according to a report by Eugene Investment & Securities Co.

Kim, a Harvard University dropout, had mulled an IPO for years, but put plans on hold to expand the business with a nationwide delivery network. Coupang, which is called “Korea’s Amazon,” has invested in new business models, including food-delivery service Coupang Eats and streaming service Coupang Play.

Coupang bet big on what it called Rocket Delivery, which started as a one-day service and became even faster with same-day deliveries. Its motto, as laid out in its IPO prospectus -- To create a world where customers wonder: “How did I ever live without Coupang?” -- may once have sounded like wishful thinking. But during the Covid-19 pandemic, people stuck at home became increasingly dependent on fast deliveries of daily staples and necessities.

South Korea’s e-commerce market is projected to be the third-largest in the world in 2021, according to Euromonitor, behind only China and the U.S. The business is large compared with the size of the economy because of a blend of speedy service, dense populations, fast internet connections and fierce competition among family-run conglomerates, such as Shinsegae Inc. and Lotte Shopping Co.

While Ebay Inc. is exploring a potential sale of local online shopping platforms including Gmarket, foreign e-commerce and delivery giants are seeking opportunities in the country. Inc. is teaming up with SK Telecom Co.’s online shopping mall 11st. Delivery Hero SE bought South Korea’s largest food delivery app Woowa Brothers Corp.

Lim of TBT viewed it as a positive sign that Coupang has been able to build out its services, while keeping costs under control.

“Although Coupang is expanding into food-delivery and video streaming businesses, it’s cutting the size of losses and its cash flow turned positive,” he said.

The company reported more than $1 billion in cash and cash equivalents at the end of 2020. Besides SoftBank, its investors include BlackRock Inc. and Sequoia Capital.

The company plans to sell shares via Goldman Sachs Group Inc., Allen & Co., JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., HSBC Holdings Plc, Deutsche Bank AG, UBS Group AG, Mizuho Financial Group and CLSA.

©2021 Bloomberg L.P.

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