SoftBank commits $1b to Korea e-commerce player Coupang

The investment, which is expected to close in July, will bring the total raised by Coupang over the past year to nearly $1.5 billion. Having announced a $100 million in a round led by Sequoia Capital in May 2014, the company then received a $300 million round led by BlackRock Private Equity Partners last December.

There has been a steady increase in valuations: Sequoia's investment was said to value Coupang at more than $1 billion; the BlackRock round came in at in excess of $2 billion; and the most recent deal values the business at a reported $5 billion. Coupang's other backers include Greenoaks Capital Management, Rose Park Advisors, Wellington Management, Maverick Capital, and Altos Ventures.

SoftBank's arrival also comes a few weeks after KKR and Anchor Equity agreed to buy a 46% stake in Coupang rival Ticket Monster from US-listed Groupon for $360 million. The deal, which saw Canada Pension Plan Investment Board and Pavilion Capital participate as co-investors, values Ticket Monster at $782 million.

Coupang and Ticket Monster need capital for the same reason: to support expansion in a market that is rapidly shifting from offline-to-online retail and from PC to mobile platforms. Online retail sales in Korea have grown 2.5-fold in the last five years, reaching KRW45.3 trillion ($41 billion) last year. Mirae Asset research estimates that mobile commerce will achieve 40% penetration by 2017, up from 2% in 2011.

Competition in the mobile age comes from not only eBay but also traditional retailers looking to go digital and mobile-centric start-ups that have graduated from Groupon-style daily deals to become e-commerce marketplaces. The latter category is led by Coupang, ahead of Ticket Monster and Wemakeprice (which continues to be bankrolled by its wealthy founder).

Coupang was founded in 2010 by Bom Kim, who remains CEO and chairman. The company reached $1 billion in annual gross merchandise value (GMV) in 2013 - faster than any other company globally - and GMV is still said to be increasing 80% year-on-year. Coupang's mobile app has been downloaded 25 million times (Korea's population is around 50 million) and the company claims to have the highest number of active users. Mobile sales account for 75% of revenue and over 85% of traffic.

SoftBank's investment will support Coupang's end-to-end fulfillment service, same-day delivery network and mobile apps. This fulfillment infrastructure includes a fleet of "Coupang men" who handle last-mile delivery. The company also plans to expand its R&D offices in Silicon Valley, Seattle, Shanghai and Seoul.

"Coupang is one of the fastest-growing and most disruptive Internet companies in the world. Coupang is setting a new standard for how e-commerce can and should be done across the globe with its innovative technologies and approach to same-day delivery, mobile commerce, and customer service," Nikesh Arora, vice chairman of SoftBank, said in a statement.

SoftBank's most financially successful investment in an Asian start-up came in 2000 with Alibaba Group. Its 32% stake in the Chinese e-commerce giant is currently worth around $72 billion.

The Coupang deal takes the Japanese group's commitments to internet companies in the region to nearly $3 billion, for the last eight months alone. It has also backed three taxi-booking platforms (Ola in India, GrabTaxi in Southeast Asia, and Kuaidi Dache in China); two e-commerce marketplaces (Snapdeal in India and Tokopedia in Indonesia); and one property portal (Housing.com in India).

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