[Exclusive] Blockchain Company Bloco Sells Shares After Lotte Investment, Samsung Ventures Exits

[Notice] ‘Blockchain Company Bloco, Lotte Investment Leads Samsung Ventures to Sell Shares’ Related

Our newspaper reported on August 25, 2022, that Bloco’s corporate value had declined, Samsung Ventures planned to sell shares, and Bloco’s IPO was uncertain. Regarding this, Bloco stated, “Bloco’s valuation has increased with each round, and the current valuation is higher than the previous round. Therefore, Samsung Ventures’ plan to sell Bloco shares is due to fund maturity...

[Asia Economy Reporter Kwangho Lee] Samsung Venture Investment's ambitious investment in the blockchain specialist company ‘Blocko’ has become a painful issue. Although it was a major blockchain portfolio, its valuation dropped. While losses are inevitable, they plan to sell existing shares. Recently, as Lotte Group has bet on Blocko, this move has attracted industry attention.

According to the investment banking (IB) industry on the 25th, Samsung Venture Investment plans to sell Blocko’s existing shares. Although the investment was made through the SVIC New Technology Investment Fund, which was funded by Samsung affiliates, they decided to put existing shares on the market after seeing the limits of Blocko’s growth. It is expected that in the future, secondary funds dedicated to existing share investments by venture capital (VC) or companies interested in blockchain firms may purchase these shares.

Samsung Venture Investment participated in Blocko’s Series A investment round in July 2016. At that time, Blocko used the investment to advance its blockchain development platform ‘Coinstack’ and strengthen collaboration with specialized solution development companies. They accelerated the expansion of the blockchain ecosystem.

Samsung Venture Investment Plans to Dispose of Series A and B Existing Shares... Growing Concerns Among FIs

As the blockchain ecosystem grew, Blocko attracted attention. Accordingly, Samsung Venture Investment participated in the Series B round in May 2018 and made a follow-on investment. At that time, they joined forces with SparkLabs Ventures, InterVest, Daesung Startup Investment, Wonik Investment Partners, POSCO Technology Investment, Premier Partners, and others.

The following August, Blocko additionally raised Series B+ investment. They secured various financial investors (FIs), including venture capitals such as LB Investment and Dadam Investment, as well as KEB Hana Bank and Shinhan Bank. With strong allies secured, a valuation in the 100 billion KRW range was mentioned. However, it is reported that the valuation has recently dropped sharply.

Samsung Venture Investment plans to first put up the shares from the Series A round. Currently, it is difficult for Blocko’s valuation to recover, and they also considered the maturity of the fund invested at that time. It is expected that they will sell the Series A shares along with the Series B shares at a discount while observing market conditions.

Major VC Investments, Hiring of Samsung Alumni, Received A Grade in Mock Technical Evaluation but Facing 'Crisis'

Despite inevitable losses, the reason for selling existing shares lies in the sharply fallen valuation. In July, Blocko received an investment of 5 billion KRW through Lotte Group’s marketing affiliate Daehong Communications. At that time, it was reported that Blocko was recognized with a valuation of 90 billion KRW, attracting attention. Subsequently, there was talk of a technology-special listing, raising the possibility of an initial public offering (IPO).

FIs expected Blocko to become the first blockchain company IPO case, but reality turned out differently. A venture capital official said, “There are rosy forecasts about Blocko, but the valuation is much lower than what is publicly known,” adding, “There is a mood that we need to exit before the valuation falls further.” He also added, “It is doubtful whether an IPO will be possible in 2023.”

Regarding this, a Samsung Venture Investment official said, “Startup valuations are based on official round investments,” and “Blocko’s corporate value increased with each round, and we have never funded at a lower price.” He added, “We do not sell existing shares at a loss.”

Meanwhile, established in 2014, Blocko is a first-generation blockchain technology company in Korea. It aims to provide optimized solutions for customers who want to adopt blockchain technology. Last year, it received an A grade in a mock technical evaluation from Korea Enterprise Data. By recruiting Vice President Seonghoon Park, who was in charge of pre-sales strategy and business partnerships for Western European mobile enterprise (B2B) sales at Samsung Electronics, the company also demonstrated its intention to pursue an IPO and new business initiatives.