China International Capital Corp, China’s leading investment bank, is set to invest 5 billion won ($4.2 million) in South Korea’s largest secondhand goods platform Joonggo Nara, the Hankuk Business Daily reported on May 30.
This marks CICC’s first direct investment in a local company.
CICC will join hands with local financial companies including private equity firm Pureun Partners, which will set up a 20 billion fund next month. Other investors include BNK Capital and a financial holding group, which will invest 3 billion won each, and a couple of strategic partners are expected to join, the report said.
Joonggo Nara started as a Naver-based interview community in 2003 and is the largest platform for used goods trading with 17 million users. Transactions reach 2-3 trillion won every year. But most of them are person-to-person transactions.
In 2014, it set up a legal entity and introduced a separate app. Last year it recorded 4.3 billion in sales but made a loss.
With the proceedings, the company will boost its app to reduce its reliance on Naver and plans to compete against existing e-commerce players.
“We want to develop a platform where anyone can become a reseller -- which is becoming a trend among students and housewives,” Joonggo Nara CEO Lee Seung-woo said.
Alibaba Group, China’s most valuable company and the operator of e-commerce platform Taobao, owns 4.84 percent in CICC.
By Park Ga-young (firstname.lastname@example.org)