Viva Republica, the operator of the South Korean finance super app Toss, has completed a $405 million Series G funding and claims to be valued at 9.1 trillion won ($7 billion), up from 8.5 trillion won in June 2021, when it raised $410 million in pre-Series G funding at a valuation of $7.4 billion (8.5 trillion won). (This year, South Korea’s currency has weakened versus the US dollar.)
The business’s recent fundraising drew our attention for several reasons, including the fact that it indicates the company is doing rather well in the face of a bleak macroeconomic forecast. Indeed, unlike global financial businesses like Klarna, Stripe, and Checkout.com, which saw their values drop significantly in 2022, Viva Republica increased their worth.
In October, Viva Republica was also on a recruiting binge, in sharp contrast to several global digital businesses, particularly finance startups, that have been undergoing significant layoffs this year. As of August, the Seoul-based corporation employed around 1,900 people.
Tonic Private Equity led the Series G round, which was joined by returning investors such as Korea Development Bank (KDB), Altos Ventures, Goodwater Capital, Greyhound Capital, Aspex Management, Bond Capital, and DUMAC. Korea Investment & Securities also contributed to the newest round of finance. In the third quarter of 2022, the fintech business announced it had completed its first and second Series G closes of roughly $226 million (295.8 billion won) and $175.8 million (229.3 billion won), respectively, and the third closure of the new capital in November.
Hyunwoo Seo, chief operating officer of Viva Republica, told TechCrunch that “profitability” is as important as growth right now, especially in these incredibly difficult market conditions. (Profitability would also go a long way toward enabling the firm, which is considering an initial public offering in the near future, to succeed.)
To that aim, Toss intends to reinvest the revenues of the most recent fundraising in its offerings, which include digital loans and online payment services for people and small businesses.
According to Seo, the extra funding would help Toss speed expansion for the challenger bank Toss Bank, which was created last year by Viva Republica, and a Robinhood-like retail investment app, Toss Securities, both of which are expected to earn a profit next year.
According to the firm, Toss Securities began a recovery in the third quarter of 22. Furthermore, Toss Bank’s registered customers have more than fivefold to 5 million from 1.1 million since its introduction in December 2021.
When questioned about its IPO plans, Seo declined to comment on the specific timetable, but according to prior media reports, Viva Republica plans to go public within the next four years after boosting its revenue by 2025.
The startup was founded in 2015 as a money-transfer app, Toss, by dentist-turned-entrepreneur Seung-gun Lee, CEO of Viva Republica. Toss entered the unicorn club in 2018 with $80 million in funding at a valuation of $1.2 billion.
It has subsequently evolved into a financial super app, with additional features like as banking, peer-to-peer lending, mobile-based stock trading and investing, insurance, credit scoring, and more. Toss most recently introduced a buy now, pay later (BNPL) program in March, which it claims has over 1 million registered users. South Korea’s BNPL Gross Merchandise Value (GMV) is expected to increase by around $36.6 billion by 2028, up from $5.6 billion in 2021, as fintech and e-commerce enterprises employ BNPL as a marketing tool.
In reality, Viva Republica claims to have the greatest market share in the country in terms of monthly active users (MAUs) with their fintech mega app, Toss, with 24 million registered users and 14 million MAUs as of August this year.
Viva Republica continues to expand its purchases. Toss Payments, which allows local shops to accept digital payments, was created two years ago after the firm acquired a payment gateway business from LG’s mobile network provider, LG U+. (In November, Toss Payments’ monthly trade volume topped $ 2.7 billion.) Toss also acquired Merchant Korea, a mobile virtual network operator (MVNO), in July of this year, with plans to provide wireless communication services to customers by 2023. The current purchase comes around eight months after it acquired a 60% share in VCNC, an operator of the Korean ride-hailing platform Tada, completely owned by car-sharing platform SoCar, to enter the mobility industry in October 2021.
Following its entry into Vietnam in 2019, Viva Republica may make equity investments in global firms, including those in Southeast Asia, as part of its worldwide expansion plan. However, Seo believes that for the time being, the company would concentrate on local operations.
According to the firm, Viva Republica with Toss Securities, Toss Payments, and Toss Insurance is anticipated to generate around 1 trillion won ($767 million) in revenues this year.
Source – TechCrunch
