[Exclusive] AI Startup 'Lunit' Fighting Cancer... Pursuing 35 Billion KRW Scale Pre-IPO

350 Billion KRW Third-Party Allocation Paid-in Capital Increase... Interest from VCs, Bio Companies
Expected Valuation 600-700 Billion KRW... "Unicorn Goal After IPO"
AI-Based Cancer Diagnosis Solution Development... Received 'AA-AA' Tech Evaluation
Preliminary Listing Review Application Next Month... Targeting KOSDAQ Entry Early Next Year

Lunit logo. [Photo by Lunit]

[Asia Economy Reporter Junhyung Lee] Medical artificial intelligence (AI) startup ‘Lunit’ is planning a ‘Pre-IPO (pre-Initial Public Offering equity investment)’ worth 35 billion KRW. Lunit intends to raise funds from major domestic and international venture capital (VC) firms. The company’s valuation is expected to reach 600 billion to 700 billion KRW in this Pre-IPO. Lunit aims to enter the KOSDAQ market early next year and will file for preliminary review for listing next month.

According to industry sources on the 21st, Lunit recently selected NH Investment & Securities as the lead manager and is conducting a Pre-IPO process worth 35 billion KRW. Existing investors such as Kakao Ventures and SoftBank Ventures, as well as global bio companies, are also considering investments. Lunit plans to raise funds through a third-party allotment paid-in capital increase. The newly issued shares amount to 648,145 shares, with an issue price of 54,000 KRW per share. The payment deadline for the new shares is the 28th of this month. A Lunit official stated, “The amount to be raised through the Pre-IPO is not finalized but will exceed 35 billion KRW,” adding, “The payment deadline is still being adjusted and may be extended.”

The company’s valuation is estimated at 600 billion to 700 billion KRW. In July this year, Lunit attracted a Series C second tranche (Tranche B) investment worth 30 billion KRW from the global bio company ‘Guardant Health,’ receiving a valuation close to 500 billion KRW. In early last year, it secured about 30 billion KRW in Series C first tranche (Tranche A) investment, which valued the company in the low 200 billion KRW range. A Lunit representative said, “Our goal after listing is to be valued close to 1 trillion KRW.” This is interpreted as a strategic move to pave the way for becoming a unicorn (a private company valued at over 1 trillion KRW) through the Pre-IPO.

Medical staff are using Lunit's lung disease diagnostic solution, 'Lunit Insight CXR,' to interpret X-ray images.
[Photo by Lunit]

Lunit is a startup developing AI solutions for cancer diagnosis and treatment. Its flagship solution is ‘Lunit INSIGHT CXR,’ which diagnoses lung diseases such as lung cancer and tuberculosis using chest X-ray images. The Korea Health Promotion Institute also introduced ‘Lunit INSIGHT MMG’ in April this year, which assists breast cancer diagnosis by analyzing mammography images. Both solutions achieve accuracy rates of 96% to 99%.

The company’s technological capabilities are among the industry’s best. In June this year, Lunit passed the technical evaluation for KOSDAQ’s special technology listing with an ‘AA-AA’ grade. It is the first domestic healthcare company to receive this evaluation. Previously, in 2016, Lunit won first place at the MICCAI (Medical Image Computing and Computer Assisted Intervention) image recognition competition, surpassing global companies such as Google and IBM, as well as the Harvard Medical School team.

Lunit plans to use the funds raised from the Pre-IPO to expand into overseas markets. The company entered the Japanese market in 2019 in partnership with Fujifilm. Last year, it expanded into markets such as Thailand and the United Arab Emirates (UAE). Lunit’s partnerships with global top three medical device companies like Philips and GE Healthcare are also seen as strong footholds for securing overseas sales channels.

Some of the funds will also be invested in new product research and development (R&D). The company is expanding its solution scope from disease diagnosis to treatment areas. In the first half of this year, Lunit developed the world’s first AI-based biomarker ‘Lunit SCOPE IO.’ This solution analyzes cancer patients’ tissue slides with AI and suggests treatments based on immunological phenotypes. Commercialization is scheduled for the second half of this year. Additionally, Lunit is developing technologies to diagnose various cancers including liver and stomach cancer, beyond lung and breast cancer.

Following the Pre-IPO, the KOSDAQ listing will also be accelerated. Lunit plans to submit the preliminary review application for KOSDAQ listing to the Korea Exchange as early as next month. The company aims to list early next year.