South Korean online secondhand marketplace Danggeun Market aims to scale up its business with 40 billion won ($33.49 million) of funding that it secured from a consortium led by Goodwater Capital and California-based Altos Ventures at the beginning of September.
“Our first target at the moment is to have 10 million users. To do that we will mainly spend money for advertising our application,” Kim Yong-hyun, co-founder of Danggeun Market told The Investor. He added that the company was also considering conducting a TV advertisement.
Established in 2015, Danggeun Market is known for providing a secondhand marketplace app that links buyers and sellers based on their locations. Its users have to put in their location to start selling and buying their goods with neighbors through the app. It uses big data to control inappropriate items like liquor being sold on its app and also has a review system to evaluate the manners of sellers and buyers.
Kim Yong-hyun, co-founder of Danggeun Market
The app has been downloaded 8 million times, and its monthly active users stood at 3 million as of end-August, the company said. The app’s monthly transactions hit 42 billion won on average.
The company added that with its users it hopes to expand its business further by providing them some community services.
“We are hoping to alternately provide a service that can connect neighbors and make them interact with each other more,” he said. “For instance, if a user needs a babysitter, we are planning to provide a platform where they can connect a person fit for the job nearby.”
This attempt to boost its business is not Danggeun Market’s first try. The Korean startup CEO has experience of successfully scaling up back in the early days of its business.
“I met our co-CEO Kim Jae-hyun when I was working at Kakao. We first began our online secondhand marketplace business only among employees working in the tech valley in Pangyo. At the time we verified our users with their business email, instead of their location. We found out that this market was too small and limited after a while” Kim said. “We changed our target to young moms in their 30s and 40s living in Pangyo as there were some requests for such a service. This change increased our transaction around tenfold.”
He added that the Korean startup could expand its business to all other cities of Korea based on this success.
Although his journey seems peaceful, he noted that there were some difficult times.
In August, Danggeun Market claimed that Line, a Japanese subsidiary of Naver, plagiarized the startup app’s design and features and introduced a similar app in Vietnam last year. Line’s Get It app is “extremely similar” to Carrot Market in terms of everything from the main display to the identification methods, Daggeun Market said at the time.
Kim added that Danggeun Market had to drop its plan to enter Vietnamese market as it cannot compete with a conglomerate like Line as a latecomer.
He emphasized that this sort of plagiarism is harmful to not only Danggeun Market but also to the overall culture of the Korean startup industry.
“If this sort of plagiarism exists, startups will become reluctant to share any know-how. This sharing is crucial because it can help boost the overall startup economy. But if startups are at risk of getting their know-how stolen by conglomerates like Naver that have lots of assets, it will make the overall culture become closed.”
By Park Ga-young and Song Seung-hyun (firstname.lastname@example.org)(email@example.com)