SoftBank’s Vision Fund is investing an additional US$2 billion in South Korea’s top e-commerce firm Coupang as the loss-making startup seeks to cement its market dominance, Reuters reports.
The latest investment follows the US$1 billion that SoftBank invested in Coupang in 2015 and values the eight-year-old startup at around US$9 billion, a source close to Coupang said.
Coupang has since grown rapidly to become the biggest player in South Korea’s e-commerce market. It clocked 2.7 trillion won (US$2.4 billion) in revenue last year, with its online sales almost as much as the next three largest e-commerce sites in the country combined, according to research firm Statista.
However, it has also suffered large losses, totaling 1.9 trillion won over the past five years, as it poured money into building new technology and its logistics infrastructure.
“The US$2 billion we are receiving now is exciting, because we can invest in more technology platforms that enable this innovation,” Coupang founder and chief executive Bom Kim told Reuters.
In the race to differentiate itself in a market crowded with delivery companies and big conglomerates, Coupang has moved beyond being just a website and a collection of warehouses and built up a huge delivery network.
It also made a splash with its “Rocket Delivery” service that promises delivery within 24 hours, as well as the more recent “Dawn Delivery” service.
“The reason we were able to do that in such a short period of time is because of that technology investment we made over the years,” Kim said, noting that the new capital will be used to expand Coupang’s investment in technology.
Coupang says its revenue has doubled in the past year and is now approaching US$5 billion in 2018.
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