Bogoplay, Court Rehabilitation Proceedings Concluded After About One Year

'Graduation' About 1 Year and 2 Months After Rehabilitation Application
Live Commerce Platform Streamlining and Content Diversification 'Accelerating Normalization'

Live commerce company 'BogoPlay,' which started with large-scale investments from the venture capital (VC) industry but fell into financial difficulties, has completed its corporate rehabilitation process. It has been about 1 year and 2 months since the rehabilitation application.

On the 9th, the Seoul Bankruptcy Court Rehabilitation Division 17 (Presiding Judge Yang Min-ho) announced, "We have decided to conclude the rehabilitation procedure for the debtor BogoPlay." The court stated, "Repayments according to the rehabilitation plan have begun, and it is judged that there will be no obstacles to carrying out the rehabilitation plan in the future."

Since the approval of the rehabilitation plan, BogoPlay has been repaying its debts without major setbacks. In particular, the court is known to have highly evaluated the prompt repayment of some tax claims.

BogoPlay originally started in 2018 through Samsung Electronics' in-house venture program 'C-Lab,' became independent within a year, and established a corporation the following year. At that time, the VC industry regarded BogoPlay as a 'potential unicorn' candidate. In the Series A investment, the first investment after seed (early-stage) funding, it raised a total of 11 billion KRW. Major investors such as ▲POSCO Technology Investment ▲DT&I Investment ▲SK Securities ▲IBK Industrial Bank ▲Colopl Next participated.

The business scale grew rapidly. The 'lowest price strategy,' including payback (refund) and discount coupon benefits, attracted consumers. Along with the rapid growth of non-face-to-face shopping due to the COVID-19 pandemic, BogoPlay's transaction volume, which was 50 billion KRW at the beginning of the service, increased to about 230 billion KRW in about three years.

However, after mostly exhausting the Series A investment funds, high interest rates and an economic recession hit. Additionally, a harsh winter period in the startup and venture investment market made it difficult to secure additional funding. In 2021, the service was suspended, and a large-scale refund incident occurred, resulting in accumulated deficits, and there were even situations where payments to companies listed on the platform were delayed.

Initially, BogoPlay intended to recover independently through investments and mergers and acquisitions (M&A) instead of going through court rehabilitation procedures. However, it failed to obtain consent from creditors such as credit card companies and listed companies, and ultimately applied for court management at the Seoul Bankruptcy Court in March last year. In December of last year, it obtained approval for the rehabilitation plan from the court with the consent of many creditors and stakeholders at the creditors' meeting.

During the approval process, the court decided that 71% of the total debt of 53.8 billion KRW would be converted into equity, and 29% would be repaid in installments over 10 years. According to the investigator's adjustment results, as of March 20 last year, BogoPlay's total assets amounted to 1.536 billion KRW. On the other hand, total liabilities were 53.839 billion KRW, exceeding assets by 52.33 billion KRW.

At that time, the court stated, "BogoPlay's going concern value is 18.119 billion KRW, and its liquidation value is 130 million KRW, showing that the going concern value is 16.819 billion KRW higher than the liquidation value. It was reported that operating the company as a going concern is more advantageous to each creditor than liquidating the company."

Meanwhile, separately from the rehabilitation procedure, BogoPlay resumed service operations. While maintaining existing customers' points, it allowed only about 10% of the payment amount to be used. The number of employees was also reduced from about 100 to around 30. BogoPlay plans to normalize its business through live commerce platform efficiency improvements and content diversification in the future.