SEOUL: SoftBank Corp. will invest $1 billion in South Korean online retailer Coupang as billionaire Masayoshi Son expands his e-commerce empire to tap new growth.
A unit of SoftBank will make the investment, which will close at the start of July, the Tokyo-based company said in a statement Wednesday. Coupang is the largest standalone e-commerce company in South Korea, it said.
Son’s investment in Alibaba Group Holding Ltd., which started with a $20 million stake 15 years ago, has paid off as its shares in China’s biggest Internet shopping mall are now worth $72 billion. Japan’s second-richest man has been looking to replicate that success in Asia with deals with India’s Snapdeal.com and Indonesia’s Tokopedia.
“This is one of the ways to become the No. 1 Internet company in the world,” said Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co., said by phone. “Consumption of e-commerce is increasing in the world and SoftBank will make similar investments in other regions.”
The company, which is also Japan’s third-largest wireless carrier, will buy new shares issued by Coupang, said Mitsuhiro Kurano, a spokesman at SoftBank. The company declined to disclose the percentage of Coupang’s shares it will own after the purchase.
Shares of SoftBank rose 0.5 percent to 7,435 yen in Tokyo before the announcement, compared with a 0.3 percent decline in the benchmark Topix. SoftBank has risen 3.1 percent this year, trailing the index’s 19 percent gain.
Nikesh Arora, vice chairman of SoftBank, joined the board of Coupang last month and will continue to serve as a director, the company said.
Son has said he plans to take stakes of 30 percent to 40 percent in Internet companies based in Asia as he seeks to follow up his success with Alibaba. SoftBank already has stakes in about 1,300 companies, including about 32 percent of Alibaba.
“This isn’t going to be next Alibaba for SoftBank, given the size of the Korean market,” said Amir Anvarzadeh, a manager of Japanese equity sales at BGC Partners Inc. in Singapore. “Snapdeal, on the other hand, could be.”
Coupang raised $300 million in funding in December, which increased its valuation to more than $2 billion, a person familiar with the deal said at the time. The company had more than 2,000 employees and offices in Korea, Shanghai, Seattle, Silicon Valley and Los Angeles, it said in December.
Mobile sales account for more than 75 percent of Coupang’s revenue. The company competes with sites such as Ticket Monster, which is owned by Groupon Inc., KKR & Co. and Hong Kong-based Anchor Equity Partners.
Backers of Coupang have included Sequoia Capital Global Equities, Greenoaks Capital Management, Rose Park Advisors, Maverick Capital, LaunchTime, Altos Ventures, Bill Ackman and Clay Christensen.
