Danggeun Market Raises $162M at $2.7B Valuation - Korea Tech News

Danggeun Market Secures $162 Million in Series D Funding

Danggeun Market, the company behind South Korea’s leading hyperlocal community application, Karrot, has announced the successful completion of a $162 million Series D funding round. This investment brings the company’s valuation to $2.7 billion. Notably, “Danggeun” translates to “carrot” in the Korean language.

Funding Details and Investors

DST Global spearheaded this funding round, with significant contributions from Aspex Management and Reverent Partners. Existing investors, including Goodwater Capital, Altos Ventures, SoftBank Ventures Asia, Kakao Ventures, Strong Ventures, and Capstone Partners, also participated.

This latest investment officially establishes Danggeun Market as a unicorn company, having now raised a total of $205 million in funding.

Strategic Focus: Local Commerce and Expansion

The company intends to bolster its local commerce capabilities through the upcoming launch of Danggeun Pay, also known as Karrot Pay.

Danggeun’s Karrot platform currently empowers approximately 300,000 local small and medium-sized businesses (SMBs) to establish an online presence, facilitating offline-to-online (O2O) services.

Consumers utilizing Danggeun Market gain access to a wide array of local offerings, ranging from fresh produce delivery to essential services like cleaning, education, real estate, and used car sales.

Future Plans: Global Reach and Technological Advancement

The newly acquired funds will be allocated towards further global expansion, business diversification, research and development (R&D), investment in cutting-edge artificial intelligence (AI) and machine learning technologies, and talent acquisition.

Co-founder and co-CEO Gary Kim stated that the company will prioritize accelerating overseas market expansion over the next two years. Within South Korea, the aim is to evolve into a comprehensive “super app.”

Company History and Founding

Founded in 2015 by Gary Kim and Paul Kim, Danggeun Market, originally conceived as “the market in your neighborhood,” has rapidly grown in prominence.

Plans are underway to introduce the Karrot Pay payment service, expand O2O services for South Korean SMEs utilizing the Karrot platform, and invest in the development of advanced AI and machine learning to personalize user feeds and enhance engagement.

Regulatory Approvals and Payment Services

Danggeun Market anticipates receiving approval from South Korea’s Financial Supervisory Service (FSS) as early as September for licenses to operate as both a payment gateway operator (PG) and a prepaid payment means operator. This approval is crucial for the launch of Karrot Pay.

International Presence and Growth

Having launched its global version of the hyperlocal community app, Karrot, in the U.K. in November 2019, Danggeun Market currently operates in 72 local communities across four countries: the U.K., the U.S., Canada, and Japan.

The company reports active transactions in cities such as Manchester, Birmingham, and Toronto. Karrot was launched in Canada and the U.S. in September and October 2020, respectively, followed by Japan in February 2021.

Future Market Strategy

Regarding future market expansion, Kim indicated a shift in strategy. Rather than designating specific countries, Danggeun Market will globally release the Karrot app and then focus on regions demonstrating organic growth.

The company will continue to prioritize areas with high population density and maintain its unique distance-based listing feature – a 6 km radius in South Korea and a maximum of 10 miles (approximately 15 km) in the U.K. – to ensure a hyperlocalized community experience.

Future Funding and IPO Considerations

Kim stated that the timing of any future funding rounds will depend on the success of its global expansion and the achievement of key metrics, such as monthly active users (MAU) and transaction volume.

An initial public offering (IPO) is not currently a priority, as the company believes it can secure sufficient capital through private funding. The focus remains on achieving stable profitability before considering a public listing.

User Growth and Engagement

Danggeun Market currently boasts over 21 million registered users, exceeding the number of households in South Korea (20.92 million). The company has experienced consistent year-on-year growth exceeding 300% since 2018.

Monthly active users (MAUs) have increased from 1.8 million in 2019 to 4.8 million in 2020, and further to 14.2 million in 2021 – a tripling of users each year for the past three years. App Annie data indicates that Danggeun Market users spend an average of two hours and two minutes per month on the app.

Industry Expert Perspectives

John Lindfors, managing partner at DST Investment Management, highlighted Danggeun Market’s “overwhelming dominance in the Korean C2C market” and its potential as a hyperlocal super app, citing its unique location-based community user behavior.

Eric Kim, co-founder and managing partner at Goodwater Capital, emphasized the importance of community connection, particularly highlighted by the COVID-19 pandemic. He noted that Danggeun Market effectively bridges the gap between offline and online interactions, fostering both in-person and digital connections.