[Saramin] Kim Beom-seok, the Gambler Who Raised Coupang's Valuation to 55 Trillion Won

Choosing New York Stock Exchange Over US Nasdaq
Confidence in Earnings Improvement and Management Performance
Strong Management Control with Dual-Class Voting Rights
WSJ "Largest Since China's Alibaba"

Kim Beom-seok, Chairman of Coupang Board of Directors / Photo by Asia Economy DB

[Asia Economy Reporter Kim Bo-kyung] The founder of Coupang, Kim Beom-seok, who grew the domestic e-commerce company into a global 'distribution giant,' is drawing worldwide attention. As Coupang recently formalized its listing on the U.S. stock market, focus is on whether Chairman Kim will rewrite the history of the Korean venture industry. By deciding to list on the U.S. stock market, Kim secured strong management rights through dual-class voting shares, a system not yet introduced in Korea. He is expected to lead Coupang with aggressive investments and employment initiatives going forward.

Born in 1978, Kim went abroad early for studies, graduating from Harvard University with a degree in political science and later dropping out of Harvard Business School's master's program. After working at Boston Consulting Group, he founded and grew Vintage Media Company, a monthly magazine targeting elite university graduates, which he later sold. In 2010, Kim established the social commerce company Coupang with a capital of 3 billion KRW. Seven years later, in 2017, Coupang was recognized as Korea's first unicorn company (valued over 1 trillion KRW), and now it is pushing for a U.S. stock market debut. He also demonstrated growth potential by securing over 3 trillion KRW in investments from SoftBank Chairman Masayoshi Son, marking a first in Korea. After serving as CEO for 10 years, Kim has been focusing on setting the company's strategic direction as chairman since December last year.

On the Lunar New Year, February 12, Coupang surprised the market by officially announcing its listing procedures on the New York Stock Exchange (NYSE) in the U.S. The announcement came past 10 p.m. Korean time. Attention was drawn to the choice of NYSE over Nasdaq, which was initially considered as the debut platform. Nasdaq hosts technology companies such as Amazon, Apple, and Facebook, which Coupang benchmarks. Despite Coupang's accumulated losses, it was known to be pursuing Nasdaq listing, which focuses more on growth potential than the stringent listing requirements of NYSE. However, the final choice of NYSE is widely seen as reflecting Kim's confidence in future performance improvements and management achievements. Additionally, the NYSE, being the world's largest stock market, is advantageous for raising large-scale funds.

One analysis suggests that Coupang's pursuit of a U.S. stock market listing, rather than a domestic one, was influenced by the dual-class voting rights system as a means to defend management control. Coupang granted Kim 'super shares' with 29 votes per share through this system. This means that even with only 2% equity, Kim can exercise 58% of the voting rights, allowing stable corporate management without threats to control.

Coupang's CEO Kim Beom-seok, Jessica Alba, and Christopher Gavigan, CPO (Chief Product Officer) of The Honest Company (from right in the photo), are announcing the exclusive domestic launch on the 28th and taking a commemorative photo.

Foreign media also showed keen interest in Coupang's NYSE listing news. The Wall Street Journal (WSJ) reported it would be the largest initial public offering (IPO) since China's Alibaba. It projected the company's valuation to reach $50 billion (approximately 55 trillion KRW) after listing, surpassing Bloomberg's estimate of $30 billion (about 33 trillion KRW) reported a month earlier. Coupang's previously concealed management performance was also revealed. Benefiting greatly from the surge in non-face-to-face and online transactions due to the COVID-19 pandemic last year, Coupang recorded sales of 13 trillion KRW, nearly doubling from the previous year, while operating losses decreased to 580 billion KRW from 710 billion KRW the year before.

In the listing application, Kim stated that Coupang's mission is to create a world where customers naturally say, "How did we live without Coupang?" He emphasized a customer-centric management philosophy by launching dawn delivery and same-day delivery services to provide products at the time customers want. He also promised to distribute stocks worth 100 billion KRW to employees and create an additional 50,000 jobs by 2025.

In just 10 years since its founding, Kim has brought a wave of change to the distribution industry. Coupang boasts 4.7 million loyal customers (paid members) who will not waver in competition with large distribution companies, and has expanded its distribution network by establishing over 100 logistics centers nationwide. It has demonstrated its presence to the extent that its role model, Amazon, hesitates to enter the Korean market.

The news of Coupang's listing also reignited discussions about Kim being a "black-haired foreigner" (Korean-American). Additionally, only two members of Coupang's parent company's board hold Korean nationality, which has drawn criticism. Coupang is also evaluated as having an American-style corporate culture, not just in its core management. Despite recording accumulated losses exceeding 4 trillion KRW, Kim received compensation of 15.8 billion KRW last year, which contrasts with domestic sentiments.

As Coupang prepares to enter the U.S. stock market, it stands as a representative business model demonstrating how much Korea's venture ecosystem has grown. It shows the possibility of growing into a unicorn company by doing business in Korea and expanding onto the global stage. Coupang's U.S. stock market listing is expected to accelerate discussions on introducing dual-class voting rights. There is growing anticipation whether Coupang can upgrade Korea's venture ecosystem and become the 'Korean version of Amazon.' This is also why global investors are closely watching the new leadership and roles Kim will demonstrate in the future.