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TMON, Coupang cautious on IPO plans

PUBLISHED : April 13, 2017 - 17:25

UPDATED : April 13, 2017 - 17:48

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[THE INVESTOR] Leading Korean e-commerce platforms Ticket Monster (TMON) and Coupang are cautious about their listing plans under the so-called “Tesla rules”, according to sources close to the matter on April 13.

While TMON is also reviewing other plans to raise funds, Coupang officials have ruled out any plans for going public in the short term.

“We are doing market research about a possible IPO, but it is only one of our many options for raising funds,” an official at TMON told The Investor. 

 

Shin Hyun-seong, CEO of e-commerc platform operatorTMON



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Earlier this month, some Korean media outlets reported that the nation’s second-largest e-commerce firm is seeking a KOSDAQ listing despite its declining losses based on more relaxed listing regulations.

In 2016, the Financial Services Commission lowered the bar for unprofitable tech startups to go public if they hold promise. The new regulations were dubbed the “Tesla rules” after the iconic US electric car maker that was able to get listed on the NASDAQ for its future potential.

Sources close to TMON, however, said the news reports seem to have blown the issue out of proportion, and that the firm is now walking on eggshells.

Coupang, the largest e-commerce platform in the country, was also reported to be mulling an IPO, but it has downplayed the issue, saying it has absolutely no solid plans for an IPO now.

“These companies seem to be taking a cautious approach as doubts have been raised over their growth potential and profitability,” a source involved with investment for startups said.

According to government data, the market share of the three social commerce players Coupang, TMON and WeMakePrice in the total retail market was 8.2 percent in 2016, almost the same level as the previous year’s 8 percent while other online platforms expanded their presence from 30.4 percent to 32.4 percent.

“That’s why they need more investments to push forward their growth but as their valuation is already quite high, it is not easy for them to secure funds,” he added.

TMON, founded in 2010, has reported operating losses for the last five years. The company logged 141.9 billion won in operating loss with 195.9 billion revenue in 2015. Its revenue soared from 32.7 billion won in 2011 but its operating loss also grew 1.5 times from 57.6 billion due to heavy marketing costs.

By Park Ga-young (gypark@heraldcorp.com)

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