April 26, 2024

• 

[THE INVESTOR] The Farmers, the operator of grocery delivery service Market Kurly, has sought applications for a lead manager of its initial public offering, according to news reports on Dec. 12.

The company declined to confirm, but The Farmers will reportedly be recruiting a brokerage by the end of this week. Mirae Asset Daewoo and NH Investment & Securities were cited as probable candidates for managing the upcoming IPO. 

The Farmers was established in December 2014 and grew dramatically over the last few years due to its unique delivery service. Through Market Kurly’s platform, users can receive their products by 7 a.m. as long as they place the order online before 11 p.m. the previous day.

Market Kurly’s sales reportedly reached over 17.3 billion won (US$15.86 million) in 2016, up almost sixfold from 2.9 billion won in 2015. Mobile platform operator Yellow Mobile CEO Lee Sang-hyuk currently is the biggest shareholder with more than 54.8 percent stake in The Farmers, followed by Market Kurly CEO Sophie Kim.

Many venture capital firms, including SEMA Translink Investment, UTC Investment and LB Investment have already invested in The Farmers.

The Korean startup in December 2016 issued redeemable convertible preference shares and received investments worth around 17 billion won.

“The Farmers is one of the leading food-tech startup in the industry,” an industry source was quoted as saying. “The company is expected to hit break-even point next year.”

However, some industry watchers say that it is too early for The Farmers to prepare for its IPO. Despite its increasing sales, the startup still lacks capabilities to generate profits. The company showed an operating loss of 8.8 billion won and 5.4 billion won in 2016 and 2015, respectively. The Farmers’ lax security system, which exposed 340,000 customer’s data in September, is also one of its weak points.

By Song Seung-hyun (ssh@heraldcorp.com)