South Korea’s fastest growing E-commerce start-up Coupang has successfully raised $2 billion in funds from SoftBank’s Vision Fund. Coupang, which was founded in 2010, is South Korea’s largest online retailer, selling over 120 million consumer products from electronics to food. SoftBank had made an initial investment of $1 billion in the startup in 2015. The latest investment makes Coupang’s today valuation at about $9 billion.
Becoming better than ‘the Amazon’
Coupang can easily claim to be the Amazon of Korea with half of the country’s population having downloaded its mobile shopping app. The e-commerce company is most popular for its path-breaking delivery services, which are easily beating Amazon’s efficiency in the area. The startup has ‘Rocket Delivery’ that promises delivery in 24 hours and ‘Dawn Delivery’ service that offers mid-night orders delivered by morning 7 am.
Since its inception, Coupang has been working hard to create a niche for itself and topple other e-commerce sites to achieve top position in the market. The startup had earned about 2.7 trillion won or $2.4 billion as sales revenues in 2017, according to research firm Statista. It has also made a loss of 1.9 trillion won or $1.6 billion over the past five years, for its expenditures in new technology and logistics.
Coupang will use the capital to build on new technology,
logistics infrastructure and speedier delivery system.
With the SoftBank Vision Fund’s investment, the founder and CEO of Coupang Bom Kim is all set to become the country’s newest and second-youngest billionaire. This will be one of the most unique feats for a young man in South Korea, where most wealth titles are retained by a handful of family-run businesses.
A significant step for SoftBank in 2018
For Softbank, the deal is quite a significant move in 2018. The Coupang investment is SoftBank’s biggest since the murder of journalist Khashoggi by suspected Saudi Arabian agents. The brutal murder of the journalist had put SoftBank under scrutiny for with ties to Saudi Arabia, which has contributed $45 billion to the nearly $100 billion Vision Fund.
The investment company had earlier made fortunes with its backing to China’s e-commerce giant Alibaba Group Holding Ltd. under the enterprising founder of SoftBank Masayoshi Son. The accelerating growth of e-commerce business of Coupang has surely seemed promising to SoftBank considering its large cash infusion in the startup.
Coupang wants to utilise the fresh capital to boost their technological system, introduce speedier deliveries, have one-touch payment system and use Artificial Intelligence to assist in purchases.
The fresh capital, which follows SoftBank Group’s initial investment of $1 billion from June 2015, will be used to bolster its technology platforms, allowing for speedier deliveries, an easy one-touch payment system, and an artificial intelligence function to assist with purchase recommendations. The startup claims to have doubled their revenue over 2017 and is forecast to reach nearly $5 billion by 2018-end. Coupang is focused Korean market but has offices in major cities in China and USA as well.