[THE INVESTOR] Korea’s leading e-commerce firm Coupang is seeking to raise fresh funds worth US$500 million ahead of a potential initial public offering in New York, according to news reports on July 13.
Newsis, a local news outlet, said the company has recently hired Goldman Sachs as the pre-IPO deal manager.
The conversion price will be based on the IPO price, and if the company fails to go public, it is required to pay back all the money it attracts. The deal is expected to carry 5-6 percent in payment-in-kind rate, which means the interest would be paid through additional shares rather than cash. The rate is not fixed and can be increased by 1-2 percentage points within the five-year contract.
A Coupang spokesperson declined to confirm the plans, saying, “We may go public one day, but at this point we have no comments.”
The new funding plans come at a time when the company is losing money despite its business expansion in recent years. According to the firm’s latest earnings report, its operating losses over the past two years have reached 1.2 trillion won (US$1.05 billion) that is almost equivalent to the total US$1.6 billion funding it attracted from SoftBank, Sequoia Capital and Black Rock.
Coupang, established by Harvard dropout Kim Bom in 2010, is best known for its signature Rocket Delivery service which promises delivery within 24 hours. The company has been spending big especially on logistics.
By Song Seung-hyun (email@example.com)