VC-backed streetwear retailers Kream, Soda to merge

The transaction is touted as creating the leading C2C and fashion e-commerce platform in Asia, with Soda continuing to operate under the same brand and management as a subsidiary of Kream. Both companies have received investment from Altos Ventures and SoftBank Ventures Asia, among others.

The business integration is expected to be completed in the first half of next year. The plan is to expand the combined company from existing bases in Korea, Japan, Thailand, Indonesia, Malaysia, and Singapore. This will reportedly involve Soda going public in Japan.

Naver launched Kream in 2020 as a limited-edition goods trading platform focused on sneakers and streetwear with an initial capital contribution of KRW 70bn. Altos and SoftBank Ventures Asia participated in a KRW 20bn Series A in March 2021 and re-upped in a KRW 100bn Series B seven months later, joined by Mirae Asset.

Kream originally sat within Snow but in 2021 became an independent subsidiary. It claims to be the largest and fastest-growing player in Korea's fashion C2C market. It also functions as a laboratory for developing new user experiences based on Naver’s mobile artificial reality (AR) camera and accompanying photo and video messenger app.

The company has grown at 230% a year on average – based on transaction volume – since its inception in 2020, according to a statement. In the past 12 months, it has raised about KRW 220bn across two Series C tranches featuring Altos, Mirae Aset, Naver, Axiom Asia, and Samsung securities.

Soda is the operator of secondhand streetwear marketplace Sneaker Dunk (SNDK), which launched in 2018 and is said to be the largest limited-edition trading platform in Japan. Major development milestones include the acquisition of Monokabu, its largest local competitor, in 2021. The acquisition was said to have given the company an 80% market share in Japan.

In the first half of 2021, Soda raised about USD 80m across two rounds from the likes of Altos, SoftBank Ventures Asia, Jafco, Basepartners, Colopl Next, and internet services player The Guild. The second of these investments also featured Kream, which supported an entry into Korea. SoftBank Vision Fund 2 provided an undisclosed sum in December 2021.

The streetwear thesis is well established in private equity, with investors noting advantages around targeting youth demographics and word-of-mouth marketing. Korea and Japan are considered the core markets in Asia, especially in terms of secondhand goods. Activity in this space includes KKR leading a USD 190m Series C for Korea’s Musinsa, a marketplace for various streetwear brands.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• Consumer
• Expansion
• South Korea
• Japan
• Altos Ventures
• SoftBank Ventures Asia
• e-commerce
• M&A