Korean second-hand goods marketplace gets $44m

BRV Capital Management, Base Investment-S2 Partners, Mirae Asset Venture Investment, Mirae Asset Capital, and Timewise Investment, a local VC player active in biotech, consumer internet, and media. Bungaejangter confirmed the size of the investment in a LinkedIn post that linked to local media reports identifying the participants. It plans to put the new capital towards improving user experience and recruiting additional talent.

This is the company’s first external funding round since it was acquired by Praxis Capital Partners last December. The domestic private equity firm is said to have paid KRW160 billion for a 90% stake.

Founded by Jae-Hoo Lee in 2010, Bungaejangter claims to be Korea’s leading trading platform for second-hand goods and among the top three most popular online malls used by teenagers. It has achieved more than 15 million downloads since inception, with gross merchandise volume (GMV) topping KRW1 trillion last year. In December alone, KRW100 billion was transacted through the platform while KRW10 billion was processed by the company’s escrow payments service.

Bungaejangter has posted an operating profit for three consecutive years, boosted by advertising and payments revenue streams in addition to the commissions received on goods sold.

B2C retailers have traditionally received most of the private funding entering e-commerce in Korea. For example, Coupang received $2 billion from SoftBank Vision Fund towards the end of 2018 at a valuation of $9 billion. It competes with the likes of KKR-owned Tmon and IMM Investment-backed Wemakeprice, as well as companies such as Market Kurly in specific verticals like grocery delivery.

However, several established offline players are also entering the online space. Around the time Coupang closed its $2 billion round, BRV joined Affinity Equity Partners in committing KRW1 trillion to Shinsegae’s e-commerce business. BRV is a technology and consumer-focused investment firm established by BlueRun Ventures. It primarily operates in Korea, China, and Japan.

Several second-hand goods platforms have achieved traction – and attracted private funding – in China and Japan. Mercari is the most prominent player in Japan, having positioned itself from the outset as C2C-only and mobile-only. The VC-backed company went public in mid-2018.

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• Topics
• North Asia
• Technology
• Consumer
• Expansion
• South Korea
• TMT
• BlueRun Ventures
• Mirae Asset Private Equity
• Timewise Investment
• Praxis Capital Partners