[THE INVESTOR] Market Kurly
, one of Korea’s first grocery-delivering platforms that has impressed the typically picky domestic customer, is now seeking to replicate its success in overseas markets.
“A couple of Silicon Valley-based investors are interested in funding our service,” said Sophie Kim, CEO and founder of The Farmers, during a recent interview with The Investor. “One of them has invested in Indian and US-based e-commerce startups, but I’m afraid it’s too early to reveal any names.”
The Farmers is the operator of Market Kurly, which has seen exponential growth since its inception in 2015. In 2016, sales reached over 17.3 billion won (US$15.86 million), up almost sixfold. Last year, the figure surged to 50 billion won. The firm is now looking to go public, having selected a lead manager.
|The Farmers CEO and founder Sophie Kim|
Market Kurly seeks W20b in new funding ahead of IPO
Its success, according to the CEO, is the innovative food industry platforms, including Market Kurly that has seen keen interest by investors.
“Right now, I think the next big thing is food,” said Kim, adding that all over the world investors are on the lookout for startups with a working business model in the food e-commerce sector that they can help scale up.
And Kim knows a few things about investors, since she was in finance and consulting before setting up her own company. A Wellesley College graduate, she has worked at firms like Goldman Sachs, McKinsey & Co. and Temasek Holdings.
Based on recent funding opportunities, the CEO expects to secure 30 billion won to 40 billion won this year without much difficulty.
One working business model that Market Kurly has for penetrating overseas markets is the Kurly Fresh Solution, a B2B service for clients who are looking to sell their products online, but don’t have the know-how or platform.
“We already have over 30 domestic startups as clients for Kurly Fresh. These are mostly offline-based companies who want to sell their food products online, but don’t have the necessary solutions,” said Kim. Premium meal delivery startup Plating and salad delivery firm FreshCode are currently using Kurly Fresh.
The Farmers has not yet decided whether to go overseas with a partner, or alone. One thing it does know is that working Asian women will be one of the biggest targets when it launches abroad.
When Market Kurly first hit the scene in 2015, it was something quite new, and definitely unrivaled.
It offered users a wide collection of groceries -- mostly organic and high-end -- that could be delivered pronto and at affordable prices. In fact, all items are delivered by 7 a.m., as long as the orders are placed before 11 p.m. the previous day. These days, the lineup has expanded to include pastries, salads and even dietary supplements.
To cut risks, the company buys directly from producers. But in order for this model to work, Market Kurly needs to have a precise understanding of the market demand, she noted.
“In the beginning, our staff had to literally eat the inventory,” said Kim. “But as our big data system piled up, we have become quite accurate in our estimates, and the percentage of products we have to dump has declined.”
Touching on rivals, Kim said both expertise and meticulous attention to details are key to the business, which is why it would be very difficult for others to mimic its success. “There are simply too many factors that have to be considered, including product quality, logistics and CRS, so just having a similar line of business or services is not going to be enough to catch up with us.”
Ultimately, Kim hopes that Market Kurly will thrive and survive to become one of the first platforms consumers think of when they have to do some online grocery shopping.
By Ahn Sung-mi and Song Seung-hyun
THE INVESTOR PROFILE
Description: The Farmers operates online grocery delivery platform Market Kurly
Founder: Sophie Kim
Headquarters: Euljiro, central Seoul
Total equity funding: 26 billion won from investors including SEMA Translink Investment, UTC Investment and LB Investment
Most recent funding: 20 billion won Series B in December 2016