February 7, 2023
South Korean Financial Super App Toss Operator Secures $405 M In Series G Funding

Viva Republica (PRNewsfoto/Viva Republica)

Viva Republica, one of South Korea’s most valuable fintech startups and operator of South Korea’s financial super app Toss, has raised $405 Million in series G funding, valuing the company at (9.1 trillion won) $7 billion.

This development represents a significant increase in the company’s valuation from 8.5 trillion won in June 2021. However, the South Korean won depreciated against the US dollar in 2022.

The series G round funding was led by Fintech-focused investor Tonic Private Equity, with returning backers including Korea Development Bank(KDB), Altos Ventures, Goodwater Capital, Aspex Management, Bond Capital, and DUMAC. Korea Investment and securities also participated in the series G funding.

According to the fintech firm, it had completed its first and second series G closes, totaling $226 million(295.8 billion won) and $175.8 million(229 billion won), respectively. In the third quarter of 2022, November, it completed the third close of new funding.

Viva Republica, which achieved unicorn status in 2018 with a $1.2 billion valuation, was founded by a dentist turned entrepreneur, Seung Gun Lee, CEO of Viva Republica. It has so far received over $940 million in equity funding.

In 2015, the company, founded in 2013, launched its financial app Toss, a mobile financial service platform. Toss has since evolved into a finance super app, with additional features such as banking peer-to-peer lending, mobile-based stock trading and investing, insurance, credit scoring, and more.

Toss most recently launched a buy now pay later (BNPL) service in March, which it claims has over 1 million registered users. South Korea’s BNPL Gross Merchandise Value (GMV) is expected to increase by approximately $ 36.6 billion by 2028, up from $5.6 billion in 2021, as fintech and eCommerce firms use BNPL as a marketing tool.

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Viva republica claims to have the largest market share with its fintech super app in the country in terms of monthly active users (MAUs) with 24 million registered users, accounting for 40% of the South Korean population. It also claims that it has 14 million monthly active users.

Viva Republica is doing relatively well facing a bleak macroeconomic outlook. Indeed, unlike global fintech companies such as Klarna, Stripe, and Checkout.com, which saw their valuations drop significantly in 2022, viva Republica increased its valuation.

Furthermore, in contrast to many global tech companies, including fintech startups, which have been conducting significant layoffs to drastically cut costs in 2022, viva republic was on a bit of a hiring spree. 

Some of the cost-cutting measures taken by tech companies include reducing guidance and budgets and downsizing headcount.

Viva Republica’s chief operating officer, Hyunwoo Seo, cited profitability and significant growth as critical for the Korean financial services app, particularly in the current challenging market condition.

This company continues to expand its acquisitions. Toss payments, which allows local merchants to accept digital payments, was launched two years ago after the startup acquired a payment gateway business from LG’s mobile network company, LG U+.

Toss also acquired merchant Korea, a mobile network operator (MVNO), in July 2022, with plans to provide wireless communication services to consumers by 2023.

Their latest acquisition comes roughly eight months after it acquired a 60% stake in VCNC, an operator of the Korean ride-hailing platform Tada, wholly owned by car-sharing platform SoCar, to enter the mobility market

Toss intends to reinvest the proceeds of its most recent fundraise in its products, which include digital lending and online payment services for individuals and small businesses.

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Furthermore, Toss intends to direct some of the new capital toward the challenger bank, Toss Bank, to accelerate growth. The platform was launched in 2021 by viva Republica and a retail investment apps like Robinhood, and Toss securities, to turn a profit in 2023.

Since its launch in December 2021, the number of registered users on Toss Bank has more than fivefold to 5 million from 1.1 million.

Finally, Toss would accelerate the growth of Toss securities.

Toss securities, toss payments and toss insurance are expected to generate approximately 1 trillion won ($767 million) in revenue in 2022.

Following its entry into Vietnam in 2019, Viva Republica may make equity investments in global companies, including those in Southeast Asia, as part of its international growth strategy. However, for the time being, Seo believes it will concentrate on domestic business.

IPO plans

An initial public offering (IPO) is the process of selling shares of a private corporation to the public for the first time in a new stock issuance.

According to previous media reports, Viva Republica intends to go public in the next four years after increasing its revenue by 2025.

This article first appeared on Techcrunch.

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