S. Korean app firm raises $54m from GIC, Sequoia China

The Viva Republica office in Seoul. Toss, which lets users send each other as much as 2 million won (S$2,440) a day speedily, helped upturn a banking system clogged with security protocols and dominated by banks. Its success is rare in a country domi
The Viva Republica office in Seoul. Toss, which lets users send each other as much as 2 million won (S$2,440) a day speedily, helped upturn a banking system clogged with security protocols and dominated by banks. Its success is rare in a country dominated by family-controlled conglomerates.PHOTO: BLOOMBERG
The Viva Republica office in Seoul. Toss, which lets users send each other as much as 2 million won (S$2,440) a day speedily, helped upturn a banking system clogged with security protocols and dominated by banks. Its success is rare in a country domi
Mr Lee Seung GunPHOTO: BLOOMBERG

SEOUL • Mr Lee Seung Gun's parents told him to get his sanity checked when he quit his secure job as a dentist with the hospital arm of Samsung Group to found a mobile app start-up.

Seven years and eight failed apps later, the founder of Viva Republica has a bona fide hit with payment service Toss.

Yesterday, Mr Lee's company said in a statement that it had won US$40 million (S$54 million) in funding from GIC and Sequoia China, bringing the total raised by the Seoul-based start-up to US$116 million.

Toss, which lets users send each other as much as 2 million won (S$2,440) a day, made a splash in South Korea by cutting the time needed for transfers to seconds.

It helped upturn a banking system clogged with security protocols and dominated by banks. Its eight million registered users ring up US$1.4 billion of transactions a month.

Toss' success is a rarity in a country where family-controlled conglomerates such as Samsung and LG rule over the economy.

SPEEDY TRANSFERS

Sending money was such a pain in South Korea. So I just wanted to get rid of my problem. Now I'm glad my app's doing the same thing for others.

MR LEE SEUNG GUN, on his payment service Toss, which cuts the time needed for money transfers to seconds.

"People fear failure in South Korea because failures are rarely forgiven," said the 36-year-old Mr Lee.

"I had security against failure, but I wasn't happy."

He put 150 million won of savings from his dental career towards Viva Republica and watched as one app after another failed, including one that lets users file an online petition and another to help with selfies.

At one time, Mr Lee had just 20,000 won in the bank and had to plead with the spouses of unpaid employees to keep them working.

Toss emerged from a legal grey area where there were no clear regulations, and did not really take off until 2015, when the country's financial watchdog ruled such person-to-person transfers were legal.

After that, Mr Lee formed partnerships with major financial institutions including Kookmin Bank and Samsung Card, an affiliate of his former employer.

Toss, which also has backing from PayPal Holdings, Goodwater Capital and Altos Ventures, has been such a success that last year, Mr Lee joined a delegation of executives accompanying South Korean President Moon Jae In for his first summit with United States President Donald Trump.

A graduate of the prestigious Seoul National University, Mr Lee came to reassess his career while treating people on a remote island as part of his mandatory military duty. He realised, with iPhone in hand, that he could reach far more people with an app than a hospital.

"Sending money was such a pain in South Korea," he said.

"So I just wanted to get rid of my problem. Now I'm glad my app's doing the same thing for others."

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on June 19, 2018, with the headline 'S. Korean app firm raises $54m from GIC, Sequoia China'. Print Edition | Subscribe