During the venture investment boom from 2021 to 2022, online platform companies were highly valued, with some even being recognized as ‘unicorns’—unlisted startups with a market value of over 1 trillion won. However, the market landscape has shifted significantly, leading to varying fortunes among these companies. While some companies are in high demand, with no existing shares available for purchase, others struggle to find buyers despite abundant available shares.
The critical factor separating the fortunes of these once-prominent platform companies is profitability. Investors are flocking to companies that have demonstrated an ability to generate operating profits. Platforms that are highly competitive in foreign markets, particularly those related to the beauty industry, are especially popular among institutional investors.
One notable example is Karrot, known in South Korea as Danggeun Market, an app providing a local community marketplace for buying and selling goods. According to the investment banking industry, on July 29, recently, Karrot’s shares held by venture capitalists were traded at a valuation of 2.5 trillion won. A venture capital insider said, “Most institutional holders of Karrot shares are reluctant to sell at this time.”
Karrot previously received a valuation of 3 trillion won and raised 180 billion won in March 2021, with a total accumulated investment of 227 billion won. Major investors include Goodwater Capital, Aspex Management, DST Global, Reverent Partners, Altos Ventures, Kakao Ventures, SVBA, Strong Ventures, and Capstone Partners.
With the startup bubble deflating this year, it has become common for shares to trade at half the company’s desired valuation. However, the fact that Karrot’s shares were traded based on a valuation of 2.5 trillion won is considered significant in the industry.
The primary reason for the high demand for Karrot shares is its profitability. Last year, the company recorded its first-ever operating profit of 17.3 billion won. Its revenue during the same period reached 127.6 billion won, a 156% increase from the previous year (49.9 billion won).
Karrot’s rapid growth in the North American market also attracts institutional investors. The platform operates globally in 41 countries, including the United States, Canada, and the United Kingdom. It has shown robust growth in Canada, ranking in the top 10 free social apps on Google Play Store and Apple App Store in March of this year. The company’s monthly active users (MAU) in Canada are reported to grow at an average rate of 15% per month. Industry experts explain that the popularity of garage sales in North America provides a favorable environment for Karrot’s success.
Similarly, Healing Paper, which operates the aesthetic medical information platform ‘Gangnam Unni,’ is another startup popular among venture capitalists. Investors, including China’s Legend Capital, KB Investment, and Hana Ventures, hold shares in the company, which has sparked significant interest from potential buyers. The company’s valuation is said to be just below 1 trillion won.
Conversely, companies unable to turn a profit or with unclear growth prospects in overseas markets struggle to attract interest, even when old shares are available. For instance, investors are trying to sell shares of ‘Ohouse’ operator Bucketplace, a one-stop-shop app for interior design, expecting an initial public offering. However, there is little buyer interest, even at valuations around 1 trillion won.
Zigbang, a real estate platform once considered a leading unicorn, has reportedly experienced a significant drop in valuation. “No institutions are willing to buy Zigbang shares at any price, but there are too many venture capitalists looking to sell,” said a VC insider.”
