Korea’s largest fintech startup CEO planning to raise $200mn

Bloomberg

Viva Republica Ltd, operator of South Korea’s largest fintech startup Toss, is planning to raise about $200 million from investors to bankroll its expansion in online banking and security trading services.
The company just embarked on its funding round and hopes to complete it in coming months, founder Lee Seung-gun said in an interview, declining to disclose the expected valuation. Lee is also aiming to go public in two to three years, with a listing in South Korea, Hong Kong, the US or two of the destinations, he said.
Toss, founded in 2011 and incorporated in 2013, is South Korea’s largest fintech startup with some 10 million monthly active users. It reached its first break-even month in April and is now processing 4.5 trillion won ($3.7 billion) of transactions a month after handling about 9.2% of the country’s online transfers in 2019.
The company is planning to start a securities brokerage service in the second half of this year and build an internet bank in July next year, helping it win a bigger slice of the $43 billion financial market in South Korea.
“At a time like this, a company that grows fast and makes profit will get more money,” Lee, the 38-year-old dentist turned startup founder, said in an interview. “Our goal is to become a finance super app, making people open Toss for any financial activities without question.”
The Seoul-based company was able to cut spending thanks to a new open banking system adopted by the government late last year. That helped shrink commission payments to banks to a third of the original cost.
Revenue grew six times in the last two years, and Lee aims to generate tens of billions of
won in profit this year and more than one hundred billion won next year.
Lee’s goal is make Toss the world’s first super app that aggregates all the services provided by fintech giants such as Paypal Holdings Inc, Robinhood Markets Inc and Credit Karma. Out of a total of 40 services, Toss’s five major units — money transfer, loans and credit rating management, insurance, investment and credit cards — evenly generate most of the revenue and profit.
Toss wants to offer securities brokerage services and loans to small businesses and consumers with interest rates between 5% and 15%. By eliminating complicated interfaces and terminology, Lee’s betting that the two services could lure half the country’s population, or about 25 million people, to actively use its app in two years. Lee will hire around 200 workers for the online bank unit and as many as 90 employees for the brokerage service.

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