Coupang will be the Amazon of Japan
Coupang’s IPO is way more significant than it appears in 2021. While JD.com is the Amazon of China, Coupang has a trajectory to become the Amazon of Japan. You don’t not want to own these two companies. Coupang is seriously backed by Japanese based SoftBank and it will make all the difference.
Japanese venture capital firm Softbank Vision Fund (SVF), which invested $2bn in 2018 and currently holds a 39.4 per cent stake in the company.
Coupang is growing incredibly fast in a reliable way and with its lucrative American IPO, it will raise in the area of $3.6 Billion. Pre-IPO it’s already raised $3.4 Billion according to Crunchbase. So what does it all mean?
SoftBank invested $1 billion in Coupang in 2015, and its Vision Fund invested an additional $2 billion in 2018. In its last funding round, Coupang was valued at $9 billion. It’s 2021 value will be much much higher.
With E-commerce accelerated by the global shutdown of the pandemic, it’s not too late to invest in the future of E-commerce. Especially in Asia where mobile commerce is typically much more mature.
Coupang isn’t just the retail marketplace winner of South Korea, but it will likely win over Non-China Asia. Just as SoftBank made its first break with Alibaba, ByteDance and Coupang will be some of its best bets 10 years from now.
Coupang filed on Friday to go public on the New York Stock Exchange, under the symbol CPNG. $CNPG. Coupang’s IPO is expected to take place on March 11, with its listing price being set on March 10. That’s this week, 2021.
Coupang has lost money in the last three years, recording an accumulated deficit of $4.12 billion as of December, according to its filing. But it’s likely worth around $55 Billion due to how quickly its revenue is growing. If you are going to invest in an unprofitable startup, this would be it. At the Last Futurist we consider Coupang a strong buy on any dip of the market.
JD went IPO at around $25, today it’s $90. But JD has many spin-off companies and its legacy hasn’t even hit its global stride. Coupang will one day rival JD.
In its filing, Coupang said 2020 total revenue jumped 91% to $11.97 billion from a year earlier, and net loss narrowed to $474.9 million from $698.8 million in the same period. After SoftBank, Greenoaks Capital Partners owns 19.8 per cent, Maverick Holdings, holds 7.7 per cent, Rose Park Advisors holds 6 per cent and BlackRock holds a 3.7 per cent stake. Coupang could be acquired by Amazon, Apple, Google, Baidu or Softbank itself one day.
Coupang said it plans to offer 120 million shares — 100 million new Class A shares and 20 million shares to existing investors — in a price range between $27 and $30. That’s pretty reasonable way to generate cash.
A $51 billion valuation would put Coupang among the five most valuable companies in Korea, of which Samsung Electronics Co. is the biggest. Korea’s other big startups with growing clout in e-commerce — the $58 billion Internet conglomerate Naver Corp., and the $39 billion messaging app Kakao Corp. — are both listed in Seoul, but were both profitable when they went public.
By going the U.S. IPO route, Coupang is able to raise so much more money than it could in Korea. I think it also suggests that an American company could one day acquire it.
Founded in 2010 by 41-year-old Harvard graduate Bom Kim, Seoul-based Coupang made a splash with its ‘Rocket Delivery’ service that promised delivery within 24 hours, in a sharp blow to the country’s family-owned retail conglomerates including Shinsegae and Lotte. To have grown this well in just a decade is astounding and means it has very solid management, execution and understanding of its own business model.
Coupang prides itself on its same-day or at least pre-dawn deliveries. It is also giving its warehouse staff and 15,000 full-time delivery workers a total of $90 million in pre-IPO stock. South Korean innovation and industry efficacy is really underestimated in technology and Coupang will eventually demonstrate it. If either Apple or Google wanted a retail footprint, which would make sense for Google AI presence in the home, Coupang would be a very meaningful acquisition.
Coupang chief executive Kim Bom-suk owns a 10.2 percent stake, but he will represent 76.7 percent of the voting power as he will hold all of Class B common shares that will be issued through the IPO, according to the filing. Coupang has more than 100 logistics facilities in 30 cities across the nation, having expanding its presence in the commerce industry with its signature same-day delivery service Rocket Delivery.
At the Last Futurist we’ve written about Amazon and the future of retail for years. We don’t see any comparable E-commerce IPO on the horizon. Had the world known what Pinduoduo was it would have invested earlier in it, but now we know, we know how advanced Asian based E-commerce really is.
China is fueling E-commerce innovation that America cannot even dream of doing in the 2020s. Amazon having AWS and Ads is a real luxury, but few understand what JD, Coupang and Lazada can become.
We believe Coupang can expand into Japan and disrupt the current players there. If Coupang become dominant in Japan and Korea, it could furthermore expand globally faster than JD due to superior branding and less Chinese back-lash. Coupang with a capital injection from its IPO can truly accelerate its growth in a way few understand in 2021.