IPO May Come in March at the Earliest
Coupang has reportedly passed a preliminary review for its listing on the U.S. Nasdaq. The Korean e-commerce company’s initial public offering (IPO) on the Nasdaq market could come in March at the earliest. Its Nasdaq listing is managed by Goldman Sachs.
Coupang, which dreams of becoming Asia's Amazon, started as a social commerce company in 2010. It switched to a direct purchase and distribution company in 2015 and has since grown rapidly based on its “rocket speed” delivery service.
Coupang racked up an estimated 11 trillion won in sales and an estimated 200 billion won in operating loss in 2020. Its sales increased 55 percent and operating loss decreased 70 percent compared with 2019.
Until 2018, Coupang’s deficit had kept growing despite rapid sales growth, which led many experts to believe that that it would be difficult for the company to become profitable like Amazon in the United States and Alibaba in China.
However, it managed to reduce deficits without hurting its rapid sales growth trend in 2019 and 2020. This led the company to accelerate its push for listing. Samsung Securities predicted that Coupang will be able to switch to surplus in 2021.
Coupang has been pushing for an IPO on the Nasdaq market since 2020. The company was originally expected to enter the stock market in the second quarter of 2021. However, experts say that Coupang’s IPO will come much earlier than expected. Coupang's corporate value is estimated at about US$30 billion despite its massive deficits.
The biggest reason for Coupang’s decision to go to Nasdaq seems to be its desire for an objective assessment of its corporate value. In Korea, Coupang’s public offering price would be conservatively calculated as no company of the same type has been listed. But analysts say that in the United States where new businesses such as e-commerce are more developed, Coupang will be able to receive a more favorable valuation.
Some observers say that Coupang’s Nasdaq listing reflects the intention of SoftBank Group chairman Masayoshi Son, who invested US$3.4 billion in Coupang through the Vision Fund. Some analysts point out that Coupang’s deficits are too large to be listed in the Korean stock market. Since its establishment, Coupang has recorded four trillion won in deficits due to aggressive marketing and investment.