South Korean grocery platform Kurly seeks 300 billion won in investment as valuation rises to 5 trillion won

South Korean online grocery platform Market Kurly is seeking 300 billion won (about $268.6 million) in investment ahead of its IPO this year, The Korea Times reported .

Image source: Market Kurly

The company raised 200 billion won separately in its last funding round in May 2020. At the time, Market Kurly was valued at around 900 billion won.

The company has been working to expand its business across the country, increase sales, and use the funds it has attracted to improve the overall value of the enterprise.

As a promoter of expanding overnight express delivery services in South Korea, Market Kurly's service is currently only available in the Greater Seoul area. Starting in May, Market Kurly will launch the service in central Chungcheong Province and expand it to major cities such as Gwangju, Daegu and Busan.

In addition to expanding its service area, Market Kurly also spent 30 billion won to build a distribution facility in Gimpo. The company currently has four distribution centers in South Korea. The new logistics center doubled its daily order volume to 440,000.

Market Kurly's new logistics center in Gimpo. Image credit: Market Kurly

The company's sales have also doubled every year. When it was first established in 2015, its revenue was 2.9 billion won. Five years later, that figure soared more than 300 times to 952.3 billion won. And according to industry forecasts, that figure will triple within a year.

Local investment banks also predicted that the online grocer's valuation would rise to 5 trillion to 6 trillion won after its U.S. listing .

However, the company is also facing snowballing losses every year, from 5.4 billion won in 2015 to 116.2 billion won in 2020. The company has now accumulated losses of 270 billion won, mainly due to the lack of funds for marketing and construction of logistics centers.

In this regard, Market Kurly said that once it builds more distribution centers in South Korea, it will be able to turn around in two to three years. However, many industry insiders have different views on this.

“Recently, South Korea’s retail giants have also launched fresh food delivery services, which will limit Market Kurly’s potential growth or profitability. Once the competition really comes to the fore, it will be difficult for Market Kurly to compete with large companies like Shinsegae or Lotte Shopping, after all, they have a lot of money and nationwide distribution channels,” said an industry insider.

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