[UP&DOWN] The 'Limited Edition Resell Platform' Cream Soon to Become a Unicorn

Annual transaction volume expected to exceed 1 trillion KRW in corporate value
Continuous capital injections lead to aggressive overseas investments beyond domestic market
Last year's operating loss of 59.5 billion KRW poses significant inspection cost burden

[Asia Economy Reporter Park So-yeon] Naver's limited edition resale platform KREAM is expanding its business based on popularity among the MZ generation. KREAM is a grandchild company of Naver, which became independent last year from Snow, a Naver subsidiary. It is a platform company that creates and provides a market where individuals can resell limited edition products such as sneakers, clothing, and watches. The transaction volume recorded in the first quarter of this year reached 370 billion KRW, and the annual transaction volume is expected to exceed 1 trillion KRW. KREAM's competitiveness lies in the inspection of authentic and counterfeit luxury goods. All products traded are thoroughly inspected at KREAM's own inspection center. Products that pass the inspection are delivered to buyers, and KREAM maintains a triple compensation policy if a product is found to be counterfeit after verification.

Recently, the domestic resale market has rapidly grown centered on the MZ generation. The domestic secondhand market, which was worth 4 trillion KRW in 2008, grew to 24 trillion KRW last year. The industry expects the C2C market, where luxury or limited edition products are traded between individuals, to surpass 1 trillion KRW this year.

Recently, KREAM is pursuing a Series C investment round worth 200 billion KRW, the largest since its establishment. The company valuation assessed during the investment process is known to be about 830 billion KRW. Upon completion of this investment, the cumulative investment will exceed 340 billion KRW, and the company valuation will surpass 1 trillion KRW. The investment is reportedly led by existing shareholder US-based VC Altos Ventures. The investment industry expects KREAM to smoothly become a unicorn. Previously, KREAM raised 20 billion KRW in Series A from Altos Ventures and SoftBank Ventures, and 100 billion KRW in Series B from existing investors including Mirae Asset Capital. Based on this, it is conducting aggressive investments domestically and internationally.

KREAM is a company with great potential for expansion into overseas business as well. Recently, KREAM has been investing in overseas peer-to-peer (C2C) platforms one after another. At the end of July, KREAM acquired a 22.47% stake in Shakehands, which operates Sneakera, Malaysia's largest sneaker resale platform. The investment amount was approximately 2.232 billion KRW. In January, KREAM invested in Rebello, the number one used home appliance trading platform in Singapore and Australia. It invested 360 million KRW in Rebello's operator Kista Technology, acquiring about 2.7% stake. Last year, KREAM acquired about 20% and 15% stakes in Sasom Company, which operates the Thai resale platform Sasom, and Soda, which operates the Japanese limited edition trading platform Snkr Dunk, respectively. Soda also operates in regions such as China, Singapore, Hong Kong, and Indonesia. Domestically, KREAM acquired a 70% stake in Fab, the operator of the luxury goods trading platform Segment, for 7 billion KRW, and a 40.74% stake in Craving Collector, the operator of the vintage fashion trading platform Collective, for 5.5 billion KRW. Last year, KREAM also acquired the domestic sneaker resale platform Nike Mania for 8 billion KRW.

Operating losses remain a challenge. KREAM recorded sales of 3.3 billion KRW and an operating loss of 59.5 billion KRW last year. Of the 59.5 billion KRW operating loss, 43.3 billion KRW came from payment fees. Payment fees include product inspection costs, and KREAM paid 25.1 billion KRW last year to Famous Studio, which is in charge of inspections. To secure funds, KREAM has been steadily borrowing business funds from its parent company Snow and others. In July, it borrowed 10 billion KRW from Snow. In February, Snow received 150 billion KRW in capital from Naver and invested about 60 billion KRW in KREAM. Earlier this month, KREAM announced a paid-in capital increase worth 170 billion KRW to secure operating funds. Of this, 50 billion KRW was directly invested by Naver.