Despite Lee’s praise for South Korea fintech, few digital finance startups in the country have listed on the KRX. Among the few notable ones are Kakao Bank and Kakao Pay. Neither company has performed especially well in capital markets since going public in late 2021. Kakao Bank’s share price is down about 70% while Kakao Pay’s has fallen 87%.
Viva Republica reportedly nixed its plan to go public on the Korea bourse because it was concerned it could not achieve an adequately high valuation. The company had been aiming to achieve a valuation of 15 to 20 trillion won (US$11 billion-US$15 billion).
It is worth noting, however, that both Kakao Bank and Kakao Pay are seen in retrospect as have been overvalued at the time of their respective market debuts. Kakao Bank briefly had a higher market capitalization than several of Korea’s largest incumbent financial groups, which was absurd given the company’s earnings in comparison to theirs.
Viva Republica’s move comes closely on the heels of K Bank’s decision to put off its own IPO in Korea. K Bank cited inadequate investor demand as its reason for putting its IPO on ice – yet again – in a recent regulatory filing. K Bank had been targeting a valuation of 5 trillion won and sought to raise 984 billion won. The valuation was already a significant decrease from the 7 trillion won it was targeting during its initial IPO plans in September 2022.
If Viva Republica does decide to list in the U.S., it would signify a growing trend for South Korean tech companies. South Korean e-commerce giant Coupang made its New York Stock Exchange debut in 2021, followed by Naver’s subsidiary Webtoon Entertainment in June. Travel booking platform Yanolja and fashion platform Musinsa are also considering potential New York listings.
Jung Eui-jung, head of the Korean Stockholders’ Alliance, an advocate for retail shareholders’ rights, told The Korea Times in in late October that Viva Republica’s decision indicates that the government’s efforts to tackle the problem of listed companies' undervaluation are not paying off sufficiently. “I think it will require time for promising companies interested in an IPO to gain confidence in joining the KOSPI or secondary bourse Kosdaq,” Jung said.