Online boom: SoftBank-backed Coupang surges to over $100 billion valuation in debut

Online boom: SoftBank-backed Coupang surges to over $100 billion valuation in debut

News: Online boom: SoftBank-backed Coupang surges to over $100 billion valuation in debut.

(Reuters) – The SoftBank Group Corp-backed Coupang was valued at roughly $ 109 billion on its market debut Thursday, after South Korea’s largest e-commerce company was valued at roughly $ 4.6 billion in its largest IPO in the U.S. earlier this year Raised US dollars.

Coupang’s stock rose 81% to open at $ 63.50. The company had valued 130 million shares sold in the IPO at $ 35 per share, which was above the marketing range of $ 32-34 per share, giving the Seoul-based e-commerce giant a market value of 60 billion USD brought.

Founded in 2010 by Korean-American billionaire Bom Suk Kim, Coupang gained prominence after launching its guaranteed same or next day delivery service in the East Asian country. SoftBank’s $ 100 billion vision fund owns 35.1% of Coupang.

Coupang’s spectacular debut strengthens the recent fortunes of the Vision Fund, which is bouncing back from an annual loss last March. A record quarterly profit was announced last month.

Coupang operates an online marketplace that sells everything from fresh groceries to toys, as well as the Coupang Eats grocery delivery app.

“We are laser-focused on our home market,” Kim said in an interview. “We’ll be investing in 50,000 more jobs and billions of dollars more, not just in infrastructure, but in the unique end-to-end technology that powers all of these services.”

In 2020, Coupang’s net sales increased 91% year over year to $ 11 billion. Net losses decreased to $ 567.6 million from $ 770.2 million a year ago.

Coupang’s successful stock offering comes because the U.S. IPO market has been the strongest in more than two decades, and investors are flocking to buy shares in tech companies that have benefited from the COVID-19 pandemic.

The IPO is the largest in the US this year, surpassing the $ 2.15 billion raised by the dating app Bumble Inc. This is also a jump in Coupang’s rating, which was set at $ 9 billion in a 2018 fundraising round, according to the Pitchbook.

Analysts in South Korea said the strong response to Coupang’s offering was the result of its market leadership in the country at a time when, like many other e-commerce companies, sales were rising due to the COVID-19 pandemic.

“Given the high level of valuation associated with pricing, the market is generous in assessing whether the company will achieve the top spot in market share,” said Park Sang-joon, analyst at Kiwoom Securities.

Coupang was the leading South Korean e-commerce company in 2020 with a 19.2% market share, according to Euromonitor, compared to 13.6% for Naver Corp and 12.8% for eBay Korea. It was the 10th largest e-commerce company in the world based on retail value excluding sales tax.

Goldman Sachs, Allen & Co, JPMorgan and Citigroup are the primary insurers for the offering.

Reporting by Chibuike Oguh and Krystal Hu in New York, Joshua Franklin in Boston, Joyce Lee, Heekyong Yang in Seoul, Noor Zainab Hussain and Niket Nishant in Bengaluru and Scott Murdoch in Hong Kong; Letter from Sumeet Chatterjee; Editing by Aurora Ellis, Stephen Coates, Gerry Doyle, and Sriraj Kalluvila

Original Source © Reuters

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