Vision Fund invests $2b in Korea’s Coupang

SoftBank previously invested $1 billion in the company in 2015, but this is the Vision Fund's first deal in Korea. It comes as Coupang invests heavily in its delivery infrastructure. The company’s 24-hour Rocket Delivery service was recently joined by an overnight option, in which certain items including fresh food and clothing can be delivered by 7 a.m. if ordered before midnight.

Coupang plans to use the new capital to invest in its technology backend in order to further improve its logistics operations, and will also consider international expansion, the company told Tech Crunch. Currently, Coupang has offices in Beijing, Shanghai, Los Angeles, Seattle, and Silicon Valley, in addition to its headquarters in Seoul.

Coupang was founded in 2010 by Bom Kim, who remains its CEO and chairman, and has been backed by a number of investors in addition to SoftBank, including Sequoia Capital and BlackRock Private Equity Partners. The company claims its revenue has doubled over the past year and is on track to reach $5 billion by the end of 2018, but losses are said to have also expanded due to infrastructure investments.

Competition is also increasing from other e-commerce start-ups such as Tmon and Wemakeprice, along with established retail players like Shinsegae, which recently raised KRW1 trillion ($878 million) from Affinity Equity Partners and BRV Capital Management for its e-commerce business.

According to Statistics Korea, a government agency, online retail sales in South Korea grew from KRW67.6 trillion in 2016 to KRW91.3 trillion in 2017, with about 60% of sales generated by online-only malls. Mobile devices accounted for 57% of the total transaction volume.

SoftBank’s investment comes as the firm faces growing scrutiny over its involvement with Saudi Arabia’s Public Investment Fund (PIF) after journalist Jamal Khashoggi was murdered at the Saudi consulate in Istanbul by government operatives with links to crown prince Mohammed bin Salman.

SoftBank CEO Masayoshi Son has publicly condemned the killing, but has also said the firm has a “responsibility to the people of Saudi Arabia” to invest the money contributed by PIF, which contributed $45 billion to the $93 billion first close of the Vision Fund. He has also not commented on whether future installments of the Vision Fund will seek investment from Saudi Arabia.

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• Topics
• North Asia
• Consumer
• Technology
• Expansion
• South Korea
• Softbank
• TMT
• Growth capital