Hyperconnect meets its Match
Show me the money: When Hyperconnect completes its deal with Match Group this summer, Korea Investment Partners (KIP) will see a colossal 900% return. KIP, one of Korea’s largest venture capital funds with $2 billion under management, invested $36 million in Hyperconnect at a $180 million valuation back in 2017.
Zoom out: With a solid track record of investments and M&As through 2020 and a line-up of IPOs in 2021, Korean venture capital is singing hallelujah! Between 2015 and 2019, VC funding in Korea doubled from $1.4 billion to over $3 billion. The market got even hotter during the pandemic.
Corporate fund Mirae Asset Venture Investment reported 159% growth. Earlier-stage VCs are making even bigger bucks. DSC investments saw their profits jump 285%.
Megadeals are pushing valuations through the roof. The FOMO is getting real.
Read: Top Korean VC firms on Seoulz.
Everybody was Kung Fu fighting 🎵
Netmarble US, the American subsidiary of Korea’s largest mobile game developer, is acquiring Los Angeles-based Kung Fu Factory. The deal comes after the two were seen canoodling last year while working on NBA Ball Stars.
Backstory: Netmarble made it big in 2015 with Lineage 2 Revolution - generating nearly a billion dollars within only a year of launching. Unlike rivals NCSoft and Nexon, the majority (67%) of Netmarble’s revenue comes from outside Korea. The American subsidiary manages about a third of the company’s business. Their offices were first established in San Francisco. They’ve since relocated to Los Angeles and pursued an IP-focused strategy of licensing franchises from Hollywood’s major labels including Marvel, Disney, and Lucasfilm.
Kung Fu Factory’s claim to fame: it was the first third-party developer to work on Mortal Kombat. More recently, the indie game developer is behind titles including Adventure Time: Card Wars Series, Spongebob Moves In, and Teenage Mutant Ninja Turtles: Rooftop Run.
Zoom out: The Kung Fu Factory acquisition is part of Netmarble’s strategy to strengthen its North American operations. In fact, NBA Ball Stars marks the company’s first publishing project.
TMON’s Pre-IPO Deal
Social e-commerce company TMON wants to get listed on the KOSDAQ. If it does, it’ll be the second e-commerce player to go public this year after Coupang. But unlike the hype around Coupang’s IPO, nervous laughter is spreading among TMON’s investors.
Context: The e-commerce player has fallen behind its competitors. While Coupang saw sales boom amid the pandemic, TMON saw sales dip 17%. The company’s “Time Commerce” concept - products at clearance prices available for a limited time - didn’t go down well with consumers with a lot of time on their hands.
Coupang’s “growth at all costs” strategy has justified its net loss, but TMON seems to be losing on both fronts.
The scoop: To cover losses and prepare for a listing, TMON got a $276 million pre-IPO round from PSA Alliance, a local private equity firm. Looks like TMON’s earlier investors might exit with the IPO.
For the record: The company’s been grappling with going public for years. In 2017, it withdrew plans for an IPO given its poor finances. This year’s not looking much better.
Is that you, Yahoo?
Japan’s SoftBank and Korea’s Naver are teaming up to take on Google. This gets a little confusing, but bear with us. Their new joint venture, A Holdings, will now manage Softbank’s existing subsidiary, Z Holdings - which currently owns Yahoo!. Under the arrangement, Z Holdings (to be owned by A Holdings) will now own both SoftBank’s Yahoo! and Naver’s Line. If we lost you, this might help:
Backstory: Line Corporation, owned by Korean internet giant Naver, is known for its messaging app, games, and characters. LINE Messenger is Japan’s most popular messaging app, emerging after the 2011 earthquake.
SoftBank holds majority shares in Yahoo! Japan. The search engine’s market share (now only 20%) has dwindled against Google’s. The Yahoo! Japan and Line merger aims to reach 100 million monthly users, mostly piggybacking on Line’s popularity.
Looking ahead: The A and Z Holdings companies are expected to launch and manage business lines across verticals including advertising, gaming, fintech, and e-commerce. The plan is utilize AI to attract new users and boost engagement, especially in emerging Asian markets.
Small deal, big players
ModuSign is raising $10 million in a Series B deal from SoftBank Ventures, Breeze Investment, KB Investment, Korea Investment Partners, and an existing investor. While the size of the deal isn’t all that impressive, the players and the market potential looks hype.
ModuSign is Korea’s top electronic contracts service catering to over 87,000 businesses and a million users. ModuSign rivals DocuSign in the west - whose market cap tripled in response to the need for secure digital transactions.
The bet: The global digital signature market is expected to grow 29% annually to reach a $8 billion market valuation by 2027.
On the radar
Companies raising over $1 million last week.
Talling is raising $13 million in a Series B deal from Megastudy, Nvestor, Shin Alternative Investment Management, Shinhan Venture Investment, and DSC Investment for their skills development platform.
Jaranda is raising $6.3 million in a Series A deal from the Korean Development Bank, Korea Investment Partners, and Daekyo Investment for their childcare and education platform.
Jobis is raising $5.8 million in a Series B deal from Atinum Investment, HB Investment, We Ventures, and Capstone Partners for their AI-based accounting service platform.
Supertone is raising $3.5 million in a Series A deal from Big Hit Entertainment for their intelligent audio products and services.
Rounded is raising $2.7 million in a Series A deal from Union Investment Partners and UTC Investment for their home decor reselling platform.
Modoojoobang (Modoo Ventures) is raising $2.7 million from Mirae Asset Venture Investment and SL investment for their shared kitchens.
Handys is raising $1.8 million in a pre-Series A deal from DSC Investment, Spring Camp, and Musinsa Partners for their rental accommodations servicing platform.
Korea finally started vaccinations. A dose of AstraZeneca PLC’s vaccine reached 18,489 people last Friday. The Pfizer/BioNTech vaccines hit the road the day after.
Your Uber is here. SK Telecom is leveraging its T Map capabilities with Uber’s ride-hailing services. The joint venture gives Uber a 51% stake.
Buying beer on the KOSDAQ. The exchange known primarily for its large tech stocks is expected to list Jeju Beer. The company recorded sales of $28 billion in 2020, up 246% from the previous year.
Blackstone: oppa Gangnam style! The Blackstone Group raised nearly $100 billion from Korean institutional investors over the past 5 years. They’re finally re-establishing an office in Seoul.
Spotted: Korean superstar in Canada. Actor Lee Min-ho arrives in Vancouver to film Apple TV’s new limited series Pachinko.
ps. we’re serious about the title - how do you feel about kimchi in paella? Drop us a line in the comments section.