The December fundraising capped what was a pretty good year for Viva Republica, all things considered. It managed to raise 300 billion won ($228 million) in Series G Bridge investment, in two installments in July and August respectively as well, with participation from Altos Ventures, the company’s first investor, as well as Goodwater, Greyhound, KDB Bank, Kwangju Bank, Daol Investment and Mirae Asset Securities.
Investors are optimistic about Viva Republica’s financial services super app Toss, as the South Korean market offers unusually fertile ground for fintech firms. It has a well banked population, but incumbents tend to have weak digital offerings, while South Korea has the world’s fastest internet connection speeds and a population that spends a lot of time online. At the same time, regulators have awarded a few tech companies (Toss being one of them) banking licenses, allowing them to swiftly move into high-margin financial services, instead of being stuck in payments like fintech in many other Asian markets.
There is really nothing like Toss in South Korea. It only has two true competitors and they are very different. Kakao is a giant platform company with a banking and payments arm, while K bank has targeted South Korea’s crypto community by linking up with leading crypto exchange UpBit.
Toss, in contrast, is a pure-play fintech presenting itself as a super app for financial services. It began as a money-transfer app in 2015 and has since added a whole bunch of different services, including P2P lending, stock trading and investing, insurance, credit scoring and deposit taking and lending once it received a banking license. Toss also has a buy now pay later (BNPL) service that it says has accrued more than 1 million registered users since its launch in March 2022. Toss Bank has about 5 million registered users, almost 10% of South Korea’s population.
Viva Republica now has its eye on making Toss profitable sooner rather than later, specifically Toss Bank and and its retail investing app Toss Securities – which are aiming to be profitable this year. Failure to reach profitability in the next few years could compromise the company’s IPO plans. It reportedly wants to go public by 2025, at which point Toss will be a decade old.