Kurly Raises $200M at $2.2B Valuation - Korean Grocery Startup
Kurly Secures $200 Million in Series F Funding
Global investment in online grocery startups remains robust, reflecting substantial growth, particularly over the past year. Kurly, a South Korean company specializing in next-day grocery delivery nationwide, has recently finalized a $200 million funding round. This Series F valuation positions the company at $2.2 billion.
Valuation Growth
The company’s valuation has experienced a significant increase within the last twelve months. In April of the previous year, Kurly completed a Series E funding round, raising $150 million at a valuation of $780 million.
Investment Details
This latest funding round was jointly led by Aspex Management, DST Global, Sequoia Capital China, and Hillhouse Capital – all of whom have previously invested in Kurly. Millennium Management and CJ Logistics Corporation are new investors participating in this round.
CJ Logistics is considered a strategic investor, having established an agreement with Kurly to facilitate the expansion of its overnight delivery capabilities to additional regions throughout South Korea.
Shift in IPO Plans
This funding announcement follows a recent strategic adjustment for the business.
Kurly had initially planned an initial public offering (IPO) in the United States later this year; however, the company announced this week its intention to pursue a listing on the Korean stock market instead.
According to a statement released to Korea Economic Daily, “Kurly evaluated both domestic and international IPO options. Following a thorough review of conditions related to its business model and stock market dynamics both locally and abroad, Kurly has determined to proceed with an IPO on the Korean stock exchange.”
Factors Influencing the IPO Decision
Reports suggest that the challenging public debut of Chinese transportation company Didi on the NYSE this month may have prompted Kurly to reconsider the performance of Asian companies on U.S. exchanges.
Furthermore, some sources indicate that existing private investors expressed a desire to liquidate their holdings, driven by concerns regarding the company’s growth trajectory – potentially accelerating the IPO process while simultaneously increasing pressure on Kurly to demonstrate improved financial performance.
Competitive Landscape
It is noteworthy that Coupang, Kurly’s primary competitor, is already publicly traded on the NYSE, with a current market capitalization of approximately $70 billion. This comparison may have also influenced Kurly’s decision.
Use of Funds
Regardless of the reasons behind the shift, this recent funding signifies continued investor confidence in the company’s market potential. Kurly stated that the funds will be allocated to enhancing its technology infrastructure, expanding its workforce, and broadening the reach of its next-day delivery services.
CEO Statement
“This funding round validates Kurly’s contributions to transforming the way consumers shop for groceries, shifting from traditional brick-and-mortar stores to a more convenient online experience through its innovative delivery service,” stated Seul-A Kim, CEO and founder of Kurly. “The company has also successfully provided customers with merchandise at competitive prices through service technology powered by proprietary data analytics. We are pleased to receive new capital, which will enable us to further invest in logistics infrastructure, personnel, and technology to continue innovating the mobile grocery market and improving the lives of consumers, producers, and workers.”
Financial Performance
The company has demonstrated strong growth, achieving $845 million in sales in 2020, representing a 124% increase year-over-year. While profitability and operating margins have not been disclosed, it is anticipated that, similar to other e-commerce businesses, Kurly’s margins will improve as it expands its overnight delivery service.
Investor Confidence
“We are excited to continue supporting Market Kurly with our investment,” commented Hermes Li, founder and portfolio manager of Aspex Management. “Korea represents one of the fastest-growing and largest e-commerce markets globally, and Kurly has been a leader in e-commerce innovation. They have cultivated a consumer-centric brand focused on superior product quality and user experience. We believe Kurly has significant potential for expansion into other consumer categories and new geographic markets. Aspex looks forward to many years of growth alongside Kurly.”
Market Trends
Online grocery delivery services have experienced a substantial surge in usage and investor interest in the past year, driven by the increased adoption of e-commerce as a result of social distancing measures implemented to mitigate the spread of COVID-19. This has resulted in significant funding for both large grocery chains like Kurly and smaller, “instant” essential grocery providers targeting urban consumers, collectively raising hundreds of millions of dollars to scale their operations in an increasingly competitive market.
- Kurly: South Korean next-day grocery delivery service.
- Series F Funding: $200 million, valuing the company at $2.2 billion.
- Key Investors: Aspex Management, DST Global, Sequoia Capital China, Hillhouse Capital, Millennium Management, CJ Logistics Corporation.
