Biggest US IPO in 2021
Coupang, backed by Softbank Group, reached a business valuation of $60 billion after the company sold 130 million shares at an upgraded price of $35 per share. The ecommerce company previously said it is looking to sell its shares in the range of $32 to $34 per share.
This way, Coupang’s IPO is the largest since the beginning of the year in the United States (US) as it easily surpassed dating app Bumble, which raised $2.15 billion. The IPO success also marks a fascinating rise in the valuation of the ecommerce business, which was valued at $9 billion in the private market in 2019.
“Considering the high level of valuation inherent in the pricing, the market is giving a generous assessment of the company’s achieving the top spot in market share,” said analyst Park Sang-joon.
The ecommerce company reported a rise in net sales of 91% to $11 billion in 2020 as the pandemic accelerated the shift to online shopping. Coupang is the largest South Korean ecommerce business with a market share of 19.2% and the 10th largest in the world.
The company is operating in the red as it reported a loss of $567.6 million for 2020. Still, this is better than a loss of $770.2 million reported a year ago.
The ecommerce business made a huge success in South Korea after it launched a campaign focused on the guaranteed same-day or next-day delivery. According to business analysts, the company is likely to further increase its market share in South Korea.
“The fact is that (Coupang is) becoming the biggest e-commerce business within Korea and 24% market share, I think, it might actually even rise further. It is possible that they can actually gain as much as 30%+ over the next few years,” said Daniel Yoo, head of global asset allocation at Yuanta Securities, to CNBC.
Softbank owns a 35.1% share in Coupang, which now translates into a holding worth more than $21 billion.
South Korean ecommerce business Coupang raised $4.6 billion to mark the biggest US IPO in 2021 after it achieved a valuation of $60 billion.
About the Author
Luigi Wewege is the Senior Vice President and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an instructor at the FinTech School which provides online training courses on the latest technology and innovation developments within the financial services industry. Luigi is also the published author of "The Digital Banking Revolution."