Naver CFO Kim Nam-seon Leads Webtoon IPO
Guides Preparations Before Stock Market Entry
Announces Aggressive Drive Post-Listing
Namseon Kim, Chief Financial Officer (CFO) of Naver, began examining the finances of Naver Webtoon in March 2022. Immediately after taking on the CFO role, he started assessing the webtoon business. Naver Webtoon had been unable to escape chronic losses due to focusing on market expansion, but Kim insisted that the company must turn profitable on an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) basis before pursuing an IPO. Since then, through bold structural reforms, he transformed the company into profitability.
As Naver Webtoon prepares for a Nasdaq listing in the U.S., with its corporate value expected to approach 4 trillion KRW, attention is focused on Kim’s role. Kim restored the company’s financial structure to profitability for the IPO and recently joined the board of directors.
Namseon Kim, Naver CFO, Joins Board of Webtoon Entertainment in the U.S.
Kim drew attention on the 17th (local time) when Naver Webtoon’s headquarters and its North American subsidiary, Webtoon Entertainment, filed a securities registration statement with the U.S. Securities and Exchange Commission (SEC). The company proposed a price range of $18 to $21 per share for its public offering. Applying the upper limit of the offering price, the post-IPO valuation would reach $2.67 billion (approximately 3.7 trillion KRW).
Just two years ago, a corporate valuation exceeding 3 trillion KRW was hard to imagine. As Kim CFO stated, to achieve profitability, Naver Webtoon cut marketing expenses. It heavily invested in technologies such as artificial intelligence (AI) recommendations to increase paying users. The establishment of a European subsidiary was temporarily halted. Workforce adjustments were also made at Webtoon Entertainment and its subsidiary Wattpad.
As a result, the company turned profitable on an adjusted EBITDA basis, which excludes one-time expenses, last year. It posted a loss of $78.21 million (approximately 108 billion KRW) in 2022 but recorded a profit of $11.66 million (approximately 16.1 billion KRW) last year and continued with a profit of $22.82 million (approximately 31.5 billion KRW) in the first quarter of this year. The marketing expense ratio relative to revenue decreased from 16.7% in 2022 to 6.0% in Q1 this year.
The timing of the IPO is also being praised. As the domestic webtoon market enters maturity, major information technology companies (big tech) such as Apple and Amazon are entering the webtoon industry, giving Naver Webtoon an opportunity to secure a leading position in the North American market.
Last month, Kim was named a registered director of Webtoon Entertainment, signaling a key role ahead. Industry insiders expect aggressive market expansion using the funds raised from the IPO, as revenue growth has slowed and monthly active users (MAU) and average revenue per user (ARPU) have stagnated during the IPO preparation period.
Naver Webtoon also announced an aggressive drive. According to the securities registration statement, when estimating the size of the paid content market, it assumed securing half of the population in major markets as users, with 40% of them as paying users. Currently, the monthly active user ratio relative to the population is 48% in South Korea, 17% in Japan, and 6% in North America, while the paid user ratio is 15.5% in South Korea, 10.1% in Japan, and 3.2% in North America.
Achievements from Acquiring Poshmark to Webtoon IPO
Prior to this, in 2022, Kim led Naver’s acquisition of Poshmark, the largest peer-to-peer (C2C) platform in North America. After several rounds of negotiations over the acquisition price, he successfully closed the 'big deal' at 2.3 trillion KRW. He began discussions when Poshmark’s valuation was declining, aiming for a fair price while signaling strong acquisition intent by offering a price higher than the initial proposal. As a result, the acquisition price was lowered by about 100 billion KRW from Poshmark’s bottom line of 2.4 trillion KRW. Post-acquisition, he also delivered financial performance, achieving profitability within one year, faster than market expectations. With the Webtoon IPO, Naver is consecutively achieving results in its future growth pillars of global commerce and content markets.
Kim has been recognized as an M&A expert since joining Naver. He provided M&A advisory at Morgan Stanley and handled private equity (PE) investments at Macquarie Asset Management. In 2019, he played a leading role when Macquarie acquired ADT Caps from SK Telecom for 2.9 trillion KRW. He was recruited in 2020 as the head of Naver’s finance office and led the newly established global M&A team. He also pursued the acquisition of the North American web novel platform Wattpad. At that time, he successfully closed the largest acquisition in Naver’s history at 660 billion KRW, securing his appointment as Naver CFO.
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