SoftBank Group Corp. is planning to invest $2 billion through its Vision Fund in South Korean online retailer Coupang. This funding is in addition to an earlier investment of $1 billion made by SoftBank three years ago.
Coupang was founded in 2010 and is now one of South Korea’s top e-commerce companies. The latest financing brings the firm’s valuation to nearly $9 billion, giving it a place on the top of the list of the most valuable start-ups in South Korea.
Coupang looks forward to using the $2 billion for new technology investments that will help improve its payment and delivery systems. The company was thinking of going public as early as next year but the current investment from SoftBank pushes this plan a bit more into the future.
Although Coupang’s revenue has seen consistent growth and is estimated to have doubled over the past one year alone, the company has incurred losses due to increased infrastructure and technology investments. The Korean online retailer also faces tough competition from established competitors who have the advantage of a large physical store presence.
SoftBank, meanwhile, has confidence in Coupang’s potential to achieve profits in the not-too-distant future. South Korea is touted as a huge and fast-growing market for ecommerce and this will be an advantage for both companies.
Earlier this month, it was reported that SoftBank is planning the IPO of its Japanese mobile unit. The Japanese firm also announced a $3 billion investment in New York-based WeWork.
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