VCs Weigh Exit Strategies for Maximum Returns Amid Dunamu-Naver Merger [Why&Next]

Expectations Rise for Dunamu's Corporate and Stock Value Growth
Woori Technology Investment and Others to Hold Stakes and Consider Exit Timing for Now
IPO Hopes Fade, Influence Declines... Kakao Investment May Opt for Cash-out
"Did They Sel

As the merger between Dunamu and Naver Financial is being rapidly pursued, venture capital (VC) firms that have invested in Dunamu are facing a dilemma. Some VCs are inclined to delay their exit in anticipation of higher investment returns as the company's valuation increases. On the other hand, there are moves by others to cash out immediately, taking into account uncertainties such as the possibility of an initial public offering (IPO).

"Aiming for a Jackpot": VCs Waiting for the Right Moment

According to the investment banking industry on October 9, the main VCs currently holding stakes in Dunamu include Kakao Investment, Woori Technology Investment, and Kakao Ventures. Kakao Investment holds a 10.59% stake, making it the third-largest shareholder after Dunamu Chairman Song Chi-hyung (25.53%) and Vice Chairman Kim Hyung-nyeon (13.11%). Woori Technology Investment holds a 7.20% stake, while Kakao Ventures has secured a single-digit stake through multiple funds.

This merger will be carried out through a comprehensive stock swap, in which Naver, via Naver Financial, will acquire 100% of Dunamu's shares. As a result, the VCs will convert their Dunamu shares into new shares of Naver Financial and are expected to recalibrate their exit strategies.

The market analysis suggests that Dunamu's incorporation into the Naver group will have a positive impact on its stock value. With the stability of being under the umbrella of a major corporation like Naver, Dunamu is expected to achieve stable growth, thereby expanding opportunities for VCs to realize returns on their investments. Accordingly, Woori Technology Investment and Kakao Ventures are reportedly planning to hold onto their shares for the time being, weighing the optimal timing to maximize profits.

A representative from a domestic VC commented, "It may be difficult to cash out immediately, but the strategic partnership with Naver increases corporate value stability and could generate industrial synergies, so there is a generally favorable view of this merger. Since the share swap ratio and share value have not yet been finalized, the prevailing sentiment is to take time and determine the optimal exit point."

"High Uncertainty": Moves to Cash Out Immediately

On the other hand, there are expectations that some financial investors (FIs), including Kakao Investment, will exercise their appraisal rights or sell their shares to other FIs to recover their investments during the merger process. As the likelihood of Dunamu going public independently has diminished and Kakao Investment's influence within the merged entity is expected to decrease, there is analysis that they will prioritize securing cash immediately to minimize uncertainty, rather than actively utilizing their shares. Kakao Investment invested several hundred billion won, including approximately 578 billion won in 2022, to acquire a stake exceeding 10%. If Dunamu is valued at around 14 trillion won, the value of Kakao Investment's shares would reach 1.5 trillion won.

Meanwhile, it is considered unfortunate for Atinum Investment and DSC Investment, both of which have already sold all of their Dunamu shares. Atinum Investment, which invested relatively early, committed a total of 7 billion won and began a phased exit in 2021. It achieved a profit of about 500 billion won, recording a return more than 70 times the principal investment. DSC Investment acquired existing shares of Dunamu in 2021, disposed of part of them within a year, and subsequently sold the remainder, generating significant profits. However, having missed the opportunity to participate in this major deal, their exit is now seen as somewhat premature.