GIC-backed fintech firm valued at $10b after funding
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Seoul-based Toss is among a handful of firms like Ant Group and Grab Holdings that are upending traditional financial services with all-in-one digital platforms that offer insurance, payments, credit scoring and securities trading. It raised 460 billion won (S$545 million) in its latest round of funding.
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SEOUL • Viva Republica, operator of South Korea's largest fintech start-up Toss, gained more funding for a US$7.4 billion (S$10 billion) valuation to help the super app grow sales twelvefold by 2025, as it heads for a potential initial public offering (IPO).
The Seoul-based start-up raised 460 billion won (S$545 million), with more than half coming from foreign investors including Alkeon Capital Management and Altos Ventures, said founder and chief executive Lee Seung-gun.
State-run Korea Development Bank pumped 100 billion won into the round.
The start-up is considering another fund raising in the first half of next year that will be its largest and the last before it seeks an IPO within the next five years.
Toss is among a handful of global companies like Ant Group and Grab Holdings that are upending traditional financial services with all-in-one digital platforms that offer insurance, payments, credit scoring and even securities trading.
It is planning to launch an online lender as early as September, after receiving South Korea's third Internet banking licence earlier this month.
That, alongside other services like its fast-growing securities platform, will help Toss double its monthly users to 20 million and grow revenue to 5 trillion won by 2025, a major leap from about 400 billion won last year.
"We are at the cusp of the great transition from traditional finance to online finance," said the 39-year-old founder.
"We've prepared so hard and now it's time to enjoy the thrills on the roller-coaster ride."
With the latest funding, Toss has become South Korea's second-most valuable start-up, behind only PUBG video game creator Krafton, which this month filed for an IPO that is likely to be South Korea's largest.
But unlike the game maker, the fintech firm and its backers - a roster that includes GIC, Sequoia China and PayPal Holdings - are in no rush to float, said Mr Lee.
"Our investors believe Toss will ultimately become a US$100 billion company, so they are not hurrying for an exit or an IPO," he said.
"At this moment, we are not preparing or reviewing an IPO but we will list our shares within three to five years.
"Nothing has been decided on destinations for the listing, but we are open to options including US or South Korea listings."
The success of Toss means Mr Lee, a former dentist whose eight earlier ventures had failed, is poised to join a growing list of billionaires in South Korea.
His stake in the start-up, approximately in the high teens, is estimated to exceed US$1 billion with the latest US$7.4 billion valuation.
Mr Lee is known to pull frequent all-nighters at the office and mentors junior founders in his free time. "It is a pleasure to see the risks that the founders took are paying off. I would be happy even if my juniors later push me out of the rich list," he said.
Toss, which cut losses by 37 per cent to 72.5 billion won last year, will use the funds for new businesses such as Toss Bank and Toss Securities, as well as expansion in South-east Asia, Mr Lee said.
Already in Vietnam, it aims to enter most countries in the region within two years.
Toss Securities officially opened its mobile trading system in March, seeking to capitalise on a resurgence in retail investing in the country.
Within the first month, it amassed two million users after a popular promotion where it gave out one random share of South Korean companies. Three months on, it has drawn 3.5 million users and expects to reach five million by the year end.
The prodigious growth has been driven mostly by users in their 20s and 30s, as a combination of easy money and free time during the pandemic drove a boom in South Korean retail trading.
Toss plans to further expand its securities trading service next month by adding US equities and exchange-traded fund trading.
It is also considering offering margin trading and automated advisory services in the first half of next year.
BLOOMBERG
