South Korean financial super app Toss closes $405M Series G as valuation rises 7% – ExamPaper

Viva Republica, an operator of the South Korean financial super app Tosshas completed a $405 million Series G financing and it says it is now valued at 9.1 trillion won ($7 billion), up from 8.5 trillion won in June 2021 when it $410 million in pre-Series F financing at a $7.4 billion (8.5 trillion won) valuation. (The currency of South Korea has depreciated against the dollar this year.)

The company’s recent funding caught our attention, including that it indicates that the company is doing relatively well amid a gloomy macroeconomic outlook. Indeed, unlike global fintech companies including Klarna, stripeand Checkout.comwhose valuations have been downgraded quite drastically in 2022, Viva Republica has raised its valuation again.

Viva Republica was also recruiting a bit in October, in stark contrast to many global technology companiesincluding fintech startups, which led to major layoffs this year. The Seoul-based company employed about 1,900 workers in August.

Fintech-focused investor Tonic Private Equity led the Series G round along with returning lenders including Korea Development Bank (KDB), Altos Ventures, Goodwater Capital, Greyhound Capital, Aspex Management, Bond Capital and DUMAC. Korea Investment & Securities also participated in the final financing. The fintech company said it completed the first and second close of Series G, earning approximately $226 million (295.8 billion won) and $175.8 million (229.3 billion won), respectively, in the third quarter of 2022 , and the third closing of the new financing in November.

Chief operating officer of Viva Republica Hyunwoo Seo told ExamPaper that “profitability” is key now and is just as important as growth, especially in these extremely difficult market conditions. (Profitability would also go a long way in enabling the company – which is eyeing a possible IPO in the short term – to successfully do so.)

To that end, Toss plans to use the proceeds from his latest fundraiser to invest in its products, which include digital loans and online payment services for individuals and local merchants.

The new capital will also help Toss accelerate the growth of challenger bank Toss Bank– launched last year by Viva Republica – and a Robinhood-like retail investment app, Discard effectswho, according to Seo, both want to turn a profit next year.

The company says Toss Securities began a turnaround in the third quarter of 2022. In addition, Toss Bank’s registered users have increased fivefold from 1.1 million to 5 million since its launch in December 2021.

When asked about its listing plan, Seo declined to comment on the exact IPO schedule, but according to previous media outlets, Viva Republica is aiming to go public in the next four years after increasing its earnings by 2025.

Founded by dentist entrepreneur Seung-gun Lee, CEO of Viva Republica, the company started in 2015 as a money transfer app, Toss. joined the unicorn club with its $80 million funding at a valuation of $1.2 billion in 2018.

Since then it has become a financial super app by adding more features like banking, P2P lending, mobile stock trading and investing, insurance, credit score service and more. Most recently, Toss launched a BNPL (Buy Now Pay Later) service in March, which it says has accumulated over 1 million registered users. South Korea’s BNLP Gross Merchandise Value (GMV) is expected to grow by about $36.6 billion by 2028up from $5.6 billion in 2021 as fintech and e-commerce companies use BNPL as one of their marketing tools.

In fact, Viva Republica claims that it has the largest market share with its fintech super app in the country in terms of monthly active users (MAUs), with 24 million registered users for Toss and 14 MAUs as of August this year.

Viva Republica continues to make acquisitions. The startup has started Discard payments, which allows local merchants to accept digital payments, two years ago through the acquisition of a payment gateway business from LG’s mobile network company LG U+. (Toss Payments’ monthly trading volume surpassed $2.7 billion in November.) Toss also acquired Merchant Korea, a mobile virtual network operator (MVNO), in July this year, which plans to launch wireless communications services to consumers by 2023. to offer. comes about eight months after it acquired a 60% stake in VCNC, an operator of the Korean ride-hailing platform Tada, wholly owned by car-sharing platform SoCar, in October 2021 to make a foray into the mobility market.

Regarding its international growth strategy, Viva Republica could make equity investments in global companies including Southeast Asia after entering Vietnam in 2019. But it’s more likely to focus on domestic affairs for now, Seo noted.

Viva Republica with Toss Securities, Toss Payments and Toss Insurance is expected to post about 1 trillion won ($767 million) in revenue next year, the company said.

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