South Korean finance superapp Toss closes $405M Series G as valuation rises 7% • TechCrunch

Viva Republica, an operator of the South Korean financial super app Slinghas completed a $405 million Series G financing, and it says it is now valued at 9.1 trillion won ($7 billion), up from 8.5 trillion won in June 2021, when it raised $410 million in pre-Series F funding at a $7.4 billion (8.5 trillion won) valuation. (South Korea’s currency has weakened against the dollar this year.)

The company’s recent funding caught our attention, including that it signals that the company is doing relatively well amid a gloomy macroeconomic outlook. In fact, unlike global fintech companies, including Klarna, Stripeand Checkout.comwhich have seen their valuations decrease quite dramatically in 2022, Viva Republica increased its valuation again.

Viva Republica also had a bit of a hiring party in October, in stark contrast to many global technology companiesincluding fintech startups, which has carried out major redundancies this year. The Seoul-based company had about 1,900 employees as of August.

Fintech-focused investor Tonic Private Equity led the Series G round alongside returning backers including Korea Development Bank (KDB), Altos Ventures, Goodwater Capital, Greyhound Capital, Aspex Management, Bond Capital and DUMAC. Korea Investment & Securities also participated in the latest financing. The fintech company said it had completed its first and second series G closes, of approximately $226 million (295.8 billion won) and $175.8 million (229.3 billion won), respectively, in the third quarter of 2022, and the third closing of the new financing in November.

Viva Republica Chief Operating Officer Hyunwoo Seo told TechCrunch that “profitability” is key now and is as important as growth, especially in these extremely tough market conditions. (Profitability would also enable the company — which is eyeing a potential IPO in the near term — to do so successfully.)

Toward that goal, Toss plans to use the proceeds from its latest fundraising to invest in its products, including digital lending and online payment services for individuals and local merchants.

The new capital will also contribute to Toss accelerating the growth of the challenger bank Toss Bank– launched last year by Viva Republica – and a Robinhood-like app for retail, Dispose of securitiesboth of which look set to turn a profit next year, according to Seo.

The company says Toss Securities began a turnaround in 3Q22. In addition, the registered users of Toss Bank have increased fivefold to 5 million from 1.1 million since its launch in December 2021.

When asked about the IPO plan, Seo declined to comment on the exact IPO plan, but according to previous media reports, Viva Republica aims to go public within the next four years after raising revenue by 2025.

Founded by dentist-turned-entrepreneur Seung-gun Lee, CEO of Viva Republica, the company started as a money transfer app, Toss, in 2015. Toss joined the unicorn club with its $80 million funding at a $1.2 billion valuation in 2018.

It has since become a finance super app by adding more features like banking, P2P lending, mobile based share trading and investment, insurance, credit rating service and more. Most recently, Toss launched a buy now pay later (BNPL) service in March, which it says has amassed more than 1 million registered users. South Korea’s BNLP Gross Merchandise Value (GMV) is projected to grow by around $36.6 billion by 2028up from $5.6 billion in 2021, as fintech and e-commerce firms use BNPL as one of their marketing tools.

In fact, Viva Republica claims it has the largest market share with its fintech super app in the country in terms of monthly active users (MAUs), with 24 million registered users for Toss and 14 MAUs as of August this year.

Viva Republica continues to push forward with its acquisitions. The startup started Throw away payments, which enables local merchants to accept digital payments, two years ago by acquiring a payment gateway business from LG’s mobile network company LG U+. (Toss Payments’ monthly trade volume passed $2.7 billion in November.) Toss also acquired Merchant Korea, a mobile virtual network operator (MVNO), in July of this year, and plans to offer wireless communications services to consumers in 2023. The latest acquisition comes approx. eight months after it acquired a 60% stake in VCNC, an operator of Korean ride-hailing platform Tada, wholly owned by car-sharing platform SoCar, in October 2021 to make inroads into the mobility market.

As for its international growth strategy, Viva Republica may make equity investments in global companies, including Southeast Asia, after entering Vietnam in 2019. But it is more likely to focus on the domestic business for now, Seo noted.

Viva Republica with Toss Securities, Toss Payments and Toss Insurance is expected to generate about 1 trillion won ($767 million) in revenue next year, according to the company.