Kurly, the South Korean company that operates the popular grocery delivery service Market Kurly, is attempting to go public again after withdrawing from its initial public offering (IPO) plan early last year. Kurly’s second shot at an IPO comes after the company posted its first monthly profit last December.
This time, Kurly is eyeing a valuation of at least $2.3 billion (3 trillion won), a target supported by its largest investor, Anchor Equity Partners. But analysts say that 3 trillion won exceeds market expectations, and Kurly must show sustained performance growth to achieve its desired valuation.
Kurly is in talks with its main IPO underwriters, NH Investment & Securities, Korea Investment & Securities, and JP Morgan, to apply for a preliminary listing on the Korea Exchange’s securities market later this year, according to sources on Feb. 13.
Kurly’s previous valuation of 6 trillion won took a hit as higher borrowing costs and inflationary pressures weighed down on the global IPO market in the last two years. When Kurly pulled out of its planned listing in January last year, its valuation had dipped to an estimated 800 billion won.
Kurly’s decision to pursue an IPO once again was boosted by the company’s recent financial turnaround, according to industry insiders. In December last year, the company announced earnings before interest, taxes, depreciation and amortization, or EBITDA, increased by more than 10 billion won compared to the previous year, posting its first profit in nine years.
A senior brokerage executive explained that Kurly failed to go public last year because it couldn’t meet the expected valuation threshold, or “hurdle price”, set by Anchor Equity Partners. Anchor invested 250 billion won in Kurly when the company was valued at 4 trillion won in 2021. But after Kurly was under financial strain after withdrawing from its initial IPO plan last year, the company secured additional investment from Anchor, receiving 120 billion won at a revised valuation of 2.5 trillion won.
As the second-largest shareholder with a 10.87% stake in Kurly, Anchor has the veto right to oppose the listing if the valuation does not meet expectations.
But analysts and industry insiders are skeptical about Kurly’s 3 trillion won valuation goal, claiming that the figure is “unrealistic” given that Kurly’s current over-the-counter valuation stands at just 700 billion won. Uncertainties regarding Kurly’s future profitability also play a significant role in this skepticism.
Kurly pioneered the so-called “dawn delivery” of groceries through its retail platform, Market Kurly. Dawn delivery refers to a particular type of ultra-fast delivery - shoppers who order groceries before 11 p.m. will have their order delivered to their doorstep by 7 a.m. the next day. Kurly was the first to adopt this delivery method in Korea, and competitors such as Coupang and Emart followed suit, starting an intense delivery and logistics war that continues today.
