Coupang Points Way for More Korean Start-ups to Go Public in U.S.

  • By Jeong Si-haeng, Yoon Hyung-jun, Oh Rora

    March 15, 2021 12:57

    Coupang may have opened the gates for more Korean start-ups into the U.S. after the e-commerce firm went public in the New York Stock Exchange last week.

    For start-ups, the NYSE has a lower entry barrier than the Korean bourse as it is possible to go public in New York if growth potential can be proven.

    The Wall Street Journal reported that Korean grocery delivery app Market Kurly is also considering going public in New York. "We are considering all possibilities, whether it be Korea or the U.S.," a company spokesman said last Friday.

    Coupang successfully made its debut with the largest IPO since Uber in 2019.

    Korean travel app Yanolja, which has been working towards the goal of going public in Korea this year, might change its plan and switch to the U.S. instead. Its value, estimated at around W3 to 5 trillion in Korea, might go up to W10 trillion in the U.S. (US$1=W1,137).

    A Coupang banner hangs on the facade of the New York Stock Exchange on March 11.

    Coupang, which started trading at US$35 last Thursday, closed the day at a whopping $49.25 after peaking at $69 at one point in trading. That is a 41 percent increase from the initial IPO price and the biggest IPO for a foreign company since China's e-commerce giant Alibaba in 2014.

    Coupang's market capitalization at the end of the first day on March 11 was $88.65 billion or W100.4 trillion, second only to Samsung Electronics' W489 trillion in Korea, and ahead of previous runner-up SK Hynix's W99 trillion. That is also over seven times the combined market capitalization of Korea's three major retail giants Shinsegae, Lotte and Hyundai, which is W13.5 trillion.

    Coupang was described by the Wall Street Journal as "the Amazon of Korea," the New York Times described it as "a start-up founded by a Harvard Business School dropout [CEO Kim Bom-suk]."

    "In a country where people are obsessed with... getting things done quickly, Coupang has become a household name by offering 'next-day' and even 'same-day' and 'dawn' delivery of groceries and millions of other items at no extra charge," the paper said.

    However, going public in New York is no guarantee of a bright future. Ten other Korean companies preceded Coupang, and nine got delisted. The only one to survive is gaming company Gravity.

    Lim Jung-wook at venture capital company TBT said, "In order to succeed in the NYSE, you need to maintain a large scale of business and sales, as well as a high level of communication with overseas investors. There are an increasing number of Korean start-ups with global capacity, so we will see more and more Korean unicorns go to the U.S."

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