by JAMES S. KIM | @james_s_kim
editor@charactermedia.com
Leading South Korean online retail company Coupang announced on Wednesday that it had secured $1 billion from Softbank, a Japanese Internet company, according to Forbes.
The Softbank after Cupang landed a $100 million investment from Sequoia last May and $300 million from BlackRock Private Equity Partners in November. The deal also makes Coupang one of just a few tech companies, including Uber, Facebook and Alibaba, to raise at least $1 billion from one investment. In all, Coupang has raised a total of $1.5 billion, making it the third-most well-financed startup in the world, behind Uber and Indian e-commerce company Flipkart. The investment is also Softbank’s largest of all time, and it is expected to place Coupang’s value at $5 billion.
Coupang said in a statement that the investment will allow the them to double its number of warehouses to 16 and hire 800 more deliverymen—all to help accelerate plans to achieve one-day delivery within South Korea. Currently, only Seoul-based customers can receive their items on the same day if their order is placed before noon.
Coupang’s founder and CEO Bom Kim dropped out of Harvard Business School in 2010 to start the e-commerce site, which initially began as a daily discounts website similar to Groupon. Since then, Coupang has become the South Korean version of Amazon.com as the dominant domestic online retailer. As smartphone usage continues to grow in South Korea, more Koreans are turning to online shopping to purchase all sorts of products, including clothing, cosmetics, flight tickets and diapers. Forbes estimates Coupang is on track to sell $3 billion-worth of goods this year, while the company’s estimates are a bit higher.
Where it differs from Amazon, however, is its focus on vertical integration. Amazon and most other e-commerce sites in Korea rely on third-party services for shipping and logistics, but Coupang has focused on controlling those aspects themselves, emphasizing speed and convenience. Customers get free shipping if the item is bought directly from the company, and the aforementioned one-day shipping is available to those in Seoul.
According to the Associated Press, half of South Korea’s population has downloaded the Coupang app, and about two-thirds of transactions with Coupang take place through the app. Four-fifths of Coupang’s traffic and revenue comes from smartphones.
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Feature image via TechCrunch
