Vision Fund invests 1.0185 trillion KRW to acquire 10% stake in Yanolja
Yanolja considers M&A using funds... Accelerates push for US Nasdaq listing
[Asia Economy Reporter Lee Seon-ae] "I regret not investing in the U.S. shared accommodation platform Airbnb."
Son Jeong-ui, Chairman of SoftBank Group, directed this regret toward the Korean comprehensive leisure platform Yanolja. Yanolja, which envied Coupang’s listing on the New York Stock Exchange and sought to be recognized with a corporate value of at least 10 trillion won by going to the U.S., was also desperate for Chairman Son’s investment. Their investment negotiations worth 1 trillion won, which began in May, were successfully concluded as expected by the market. (Refer to our exclusive article on May 25: Yanolja in talks to raise 1 trillion won investment from ‘SoftBank Vision Fund’... pursuing Nasdaq listing)
According to the investment banking (IB) industry on the 8th, Yanolja finalized investment negotiations worth 1 trillion won with the world’s largest venture capital (VC) investment fund, the SoftBank Vision Fund (a technology investment fund worth 100 billion dollars, established with 28.1 billion dollars from SoftBank and 45 billion dollars from the Saudi Arabian sovereign wealth fund PIF). The Vision Fund will invest 1.0185 trillion won to acquire a 10% stake in Yanolja. This will be through a combination of secondary share purchase and new share issuance. Yanolja and the Vision Fund will sign a stock purchase agreement (SPA) next week.
With this, Yanolja became the fourth domestic company to receive exclusive investment support from the Vision Fund. Previously, the Vision Fund invested in Coupang (3 billion dollars, about 3.41 trillion won), iU-NO Media (160 million dollars, about 180 billion won), and Riiid (175 million dollars, about 200 billion won).
The investment in Yanolja was strongly influenced by Chairman Son’s will. After closely observing Airbnb’s dazzling growth, he became confident in Yanolja’s potential. Airbnb is a global company often used as a benchmark when discussing Yanolja’s corporate value.
Chairman Son plans to double the number of startups in the Vision Fund’s portfolio to about 500 and generate profits by taking dozens of companies public (IPO) every year. He defines the Vision Fund’s business model as a manufacturer of golden eggs. The representative successful investment in the domestic market under this vision is Coupang. Based on the successful U.S. listing of Coupang in March, the Vision Fund is now more actively seeking promising domestic companies.
Yanolja also welcomed this move by the Vision Fund. Domestic securities firms estimate Yanolja’s corporate value at a maximum of 4 to 5 trillion won, but Yanolja hopes to be valued at over 10 trillion won through a U.S. listing. This is because Airbnb, which generates ten times Yanolja’s revenue, has a market capitalization of 131 trillion won. Moreover, it had become difficult to raise further investment domestically. Yanolja surpassed a corporate value of 1 trillion won in 2019, becoming a unicorn (a startup valued at over 1 trillion won). It raised 180 million dollars (about 203 billion won) from Singapore’s sovereign wealth fund GIC and Booking Holdings. As its corporate value soared to the trillion-won level, it became difficult to adjust investment prices with domestic VCs. Yanolja’s existing investors include Partners Investment, Murex Partners, AJU IB Investment, SBI Investment, SL Investment, and Skylake Investment.
The Vision Fund’s investment is expected to accelerate Yanolja’s Nasdaq listing. The Vision Fund’s recognition of Yanolja’s corporate value at 10 trillion won is based on the expectation of a Nasdaq listing. The market anticipates that the Vision Fund will begin efforts to make Yanolja the second Coupang. Yanolja is also regarded as having joined the ranks of decacorns (unlisted venture companies valued at over 11 trillion won).
However, many challenges are expected before the Nasdaq listing. Since its business portfolio is limited to the domestic market, diversification is necessary. Furthermore, there are many competitors in the global market. Accordingly, Yanolja is expected to actively use the 1 trillion won capital for mergers and acquisitions (M&A) to enhance its global business capabilities. It is reported that Yanolja is also considering acquiring companies in related industries to target the Southeast Asian market.
An IB industry insider said, "Yanolja pursued a two-track strategy by simultaneously proceeding with domestic and U.S. listing procedures but has halted the domestic listing process. For platform companies, massive investment capital is essential to establish market dominance, so the Vision Fund’s investment support will strengthen Yanolja’s path to Nasdaq."
Meanwhile, Yanolja’s B2B transaction volume exceeded 11.6 trillion won after acquiring India’s Easy Technosys, which ranks second in the global market for hotel management systems (PMS, Property Management System) last year. Despite the impact of COVID-19, it achieved profitability for the first time. Last year, it recorded separate sales of 192 billion won and operating profit of 16.1 billion won. Sales increased by 43.8% compared to the previous year, and operating profit turned positive from a loss of 6.2 billion won the previous year. This was the result of enhancing global capabilities by providing cloud-based PMS and other SaaS (Software as a Service) to about 26,000 clients operating hotels, leisure facilities, and restaurants in 170 countries worldwide.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
