Korea Development Bank’s plan to invest 100 billion won ($89.4 million) in the nation’s latest internet-only bank, backed by Viva Republica, the operator of fintech app Toss, is meant to keep local unicorns in the local market, the head of the state-run bank said.
The announcement follows the nation’s financial regulator’s decision last week to grant final approval to a consortium led by Viva Republica to launch and operate the nation’s third internet-only bank. Toss Bank will compete against K bank and KakaoBank, the two existing internet-only banks here, after launching operations in September.
“We need to swiftly make future-oriented investments,” KDB Chairman Lee Dong-gull said during an online press conference Monday.
“Critics complain about unicorns and startups going public on overseas stock markets and our country failing to enjoy the benefits -- it’s our business, which is why we need to scale up,” he added.
Lee’s remarks underscored recent concerns here that major Korean unicorns have decided to go public or are planning to debut in the United States. E-commerce giant Coupang was listed on the New York Stock Exchange in March, while up-and-coming fresh food delivery platform Market Kurly is gearing up for its US debut later this year. The premium grocery delivery business has already designated Goldman Sachs, Morgan Stanley and JP Morgan as lead underwriters.
While many have applauded the businesses’ decisions to debut overseas, concerns are growing over the lack of attractiveness of the local stock market and its weakening presence. Some are even speaking of a “unicorn exodus.”
If the investment materializes, it would mark the first by a state-run bank in an internet-only bank here.
KDB is focusing on fostering local startups and launched a special “scale-up venture capital” team early last year.
Toss Bank will focus on lending to people with medium and low credit scores, Viva Republica said.
In 2017, K bank and KakaoBank kicked off round-the-clock services without brick-and-mortar branches. The services gained more popularity and traction with the COVID-19 pandemic, as customers came to expect less face-to-face contact.
By Jung Min-kyung (email@example.com)