Korean online grocery player secures $88m Series D

The round was led by Global Venture Partners and existing investors, including Sequoia Capital China. The company – which has raised KRW184 billion since inception – is also backed by Translink Investment, UTC Investment, DS Investment, LB Investment, Korea Investment Partners, Capstone Partners, Mirae Asset Venture Investment, SK Networks, G.N. Tech Venture Capital, and DST Global, according to AVCJ Research.

Market Kurly – originally known as The Farmers – was founded by Sophie Kim, who came up with the idea while working as a consultant for Bain & Company. She previously worked for Temasek Holdings, McKinsey & Company, and Goldman Sachs.

The company is best known for its Morning Star Delivery service, which allows customers to place orders by 11 a.m. and receive the goods by 7 a.m. the following morning, including fresh produce harvested that same day. It has found a market among mid to high-income families that have little time for grocery shopping and are willing to pay a premium for quality products.

The company has around 300,000 monthly active users, Kim told Bloomberg in February. Sales reached KRW157 billion in 2018, three times the previous year’s total. In January alone, sales came to KRW30 billion, a single month record.

The new funding will go towards improved supply chain management through closer cooperation with suppliers, and the recruitment of additional staff, especially in the IT space. Market Kurly is keen to use technology to accelerate its development, with the construction of a processing platform for large-scale data management among the priorities.

“Market Kurly’s innovative, ‘cold-chain’ system from producer to consumer, which maintains temperatures optimally suited to each product, means that we can offer customers the freshest products at the fastest speeds, compared to other online grocery services. With this latest investment, we can secure internal processes and build a talent pool so that we can continue to increase our grocery market share, while maintaining quality,” Kim said in a statement.

Spyro Korsanos, a managing partner at Global Venture Partners, added that the company “offers Korean consumers something unique - sustainable, high-quality food combined with excellent customer service and leading-edge logistics.”

Online retail transaction volume came to KRW113.7 trillion last year, up from KRW91.3 trillion in 2017. Food and beverage accounted for KRW10.5 trillion, with a further KRW2.9 trillion from agriculture, livestock and fishery product sales. Approximately two-thirds of this transaction volume came from mobile devices.

Several other groups are actively targeting the online grocery delivery space, including Coupang, which last year added an overnight option to its next-day Rocket Delivery service. Certain items such as fresh food and clothing will be delivered by 7 a.m. if ordered before midnight. Coupang has received substantial private funding, most recently $2 billion from SoftBank Vision Fund.

E-mart, Shinsegae’s discount store chain operator also has an online grocery offering. Last year, Affinity Equity Partners and BRV Capital Management invested KRW1 trillion in the e-commerce businesses of Shinsegae Department Store and E-mart. The two businesses will be spun out into a dedicated platform.

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• Topics
• North Asia
• Expansion
• Technology
• Consumer
• South Korea
• TMT
• Growth capital
• Global Venture Partners
• Sequoia Capital