Korea's Kurly raises $200m, targets domestic listing

It comes as the company’s biggest competitor, Coupang, enjoys robust post-IPO trading in the US and underscores a broader Korean e-commerce opportunity. Coupang, a more diversified marketplace that raised about $3.5 billion in private funding - latterly at a valuation of $9 billion - before going public in March. It currently has a market capitalization of about $73 billion.

Kurly was valued at $780 million as recently as its $170 million Series E last year. DST Global, which led that round, has returned to co-lead the Series F alongside Sequoia Capital China, Hillhouse Capital, and Hong Kong's Aspex Management. They were supported by Millennium Management and CJ Logistics.

The change in heart regarding location of listing follows alterations in local regulations intended to attract technology start-ups. As of March, loss-making companies can feature in the benchmark KOSPI if their market capitalization exceeds KRW1 trillion ($874 million).

Much of the attention has been attributed to a pandemic-driven jump in grocery delivery demand, with CJ Logistics noting its volumes for vegetables, seafood, fruit increased 105%, 81%, and 57%, respectively, during 2020. CJ agreed a partnership with Kurly in April to strengthen its early-morning services, for which it says business has spiked 181% over the course of the pandemic.

Early-morning service is Kurly’s key specialization and differentiator. Within Seoul, the company claims to provide a full cold chain system capable of taking orders made before 11 p.m. and delivering them by 7 a.m. the next day. Its cooperation with CJ in this area will initially concentrate on the Chungcheong region before expanding nationwide.

The consumer-facing platform, Market Kurly, is also positioned as especially attuned to food trends, with a dedicated team for curating unique and rare product lists featured as part of the offering. Sales are said to have improved 124% during 2020 to $845 million. This compares to about $141 million in 2018.

Spyro Korsanos, a managing general partner at Fuse Venture Partners - which led Kurly's KRW100 billion Series D in 2019 - told AVCJ earlier this year that the combination of infrastructure and product quality represents a sizeable barrier to entry.

“We think a narrower focus, with superior service levels and superior unit economics, rather than dispersing your focus across multiple different types of SKUs [stock keeping units] means Kurly is able to execute better,” he said. “If anything, others who might be overspending will correct themselves at a future point in time. When players are seeking to outspend each other, ultimately the most efficient capital players will see the most success.”

Kurly has raised KRW640 billion ($558 million) in total since its inception in 2015, with previous backers also including SK Networks, Translink Capital, Mirae Asset Venture Investment, Capstone Partners, and Korea Investment Partners. Timing and expectations for the upcoming IPO have yet to be confirmed.

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• Topics
• North Asia
• Consumer
• Expansion
• South Korea
• DST Advisors
• Sequoia Capital
• Hillhouse Capital Management
• Food
• TMT
• Logistics