Coupang announced a plan to list on the New York Stock Exchange on February 12th. The Wall Street Journal (WSJ) estimated the corporate value of Coupang at $ 50 billion (about $ 55 trillion won).
Kim Bum-seok, founder and chairman of the board of Coupang, is reportedly told over a document until the last minute before submitting a report for listing on the New York Stock Exchange (NYSE). It was “the founder’s letter.” It was sent by Kim to global institutional investors and the US Securities and Exchange Commission (SEC), which will set Coupang’s IPO. The letter contains management’s promises to be kept, even after Coupang’s listing. Sources said Coupang’s leaders, including Kim, burned midnight oil to write a two-page letter.
Distribution industry insiders are more shocked by the letter’s announcement than by Coupang’s direct listing on the New York Stock Exchange or its valuation. This is because Coupang unveiled its strategy of focusing on the e-commerce market in Korea, contrary to expectations that it will become public to raise funds for overseas expansion. Analysts say Coupang has lifted the curtain on fierce competition for survival among Korean online and offline retailers.
Coupang is the first company with a business base in Korea to seek listing on the New York Stock Exchange. The listing is the second largest in scale after China’s Alibaba. Chairman Kim had proposed listing Coupang in the United States as he attracted about four trillion won in investment from overseas venture capitalists such as the SoftBank Vision Fund led by Softbank Group Chairman Masayoshi Son and Altos Ventures, a Silicon Valley-based venture capital. Experts say it is natural for Coupang to have its value valued in the world’s largest capital market, as major global players invested in it.
Some say it is a strategy for Coupang to avoid Korea’s unique rules. Coupang said in a report to the SEC that Kim will be the only shareholder to receive “super shares” called Class B ordinary shares. They have 29 times more voting rights than ordinary Class A shares. Such various voting rights are designed to defend management rights against hostile merger and acquisition attempts (M&A), but Korea does not have a system for them.
Coupang has been valued at $ 50 billion by foreign institutions for its business in Korea alone. That’s nearly seven times the market value of the retailers affiliated with the Shinsegae Group, such as the Shinsegae Department Store and E-Mart (approximately $ 8.24 trillion won per 9th year).
Analysts say Coupang’s competitiveness is an extraordinary delivery system found nowhere else in the world. “The most important watershed in Coupang’s growth was a decision to establish its own logistics network across the country,” said President Kim in his letter. Its strategy is to change the landscape of the distribution and logistics industry by realizing same-day delivery through additional post-morning delivery investments.
The list of companies owned by SoftBank Vision Fund, the largest shareholder in Coupang, includes a number of global mobility service companies. “The best field for autonomous driving is delivery vehicles that run on fixed routes,” said an investment industry official. “Logistics using robots will also be Coupang’s direction in the future.”
Coupang said it would raise at least $ 1 billion in funds through the IPO. The amount depends on Coupang’s public offering price and the size of the new shares to be issued. Given recent cases of listed companies like DoorDash, the actual amount raised is expected to be close to 3 trillion won to 5 trillion won.