Trillion-Won IPOs: Liversmed and Semifive Set to Go Public at Year-End
Musinsa, Gudai Global, Upstage, and More Expected to List Next Year
VCs Anticipate a Virtuous Cycle of Capital Recovery and Reinvestment
As major companies with corporate values exceeding 1 trillion won go public at the end of the year, the previously stagnant domestic venture investment market is finally showing signs of recovery. In particular, expectations are rising that the initial public offering (IPO) market will heat up even further next year, and the venture capital (VC) industry, which has suffered from a prolonged drought in exits, is anticipating a "harvest season."
Trillion-Won Valuations: LIFESMED and SEMIFIVE Go Public
LIFESMED and SEMIFIVE, two major companies with trillion-won valuations, are both set to go public at the end of the year.
LIFESMED, a medical device company, will debut on the KOSDAQ market on December 24. Its public offering for general investors, held from December 15 to 16, closed with a competition ratio of 390 to 1. It is rare for a company in the domestic bio and medical device sector, especially in the field of surgical instruments, to go public on KOSDAQ with a market capitalization of 1.3 trillion won.
SEMIFIVE, an artificial intelligence (AI) semiconductor design company, will be listed on December 29, becoming the final company to go public on KOSDAQ this year. During the demand forecasting conducted from December 10 to 16, a total of 2,159 institutional investors from Korea and abroad participated, resulting in a competition ratio of 436.9 to 1. The total amount raised from the public offering was 129.6 billion won, and the expected market capitalization after listing is 809.2 billion won. The lead underwriters, Samsung Securities and UBS Securities, estimated SEMIFIVE's fair corporate value at approximately 1.049 trillion won, using comparative analysis with companies such as Faraday, Alchip, and GUC from Taiwan. Given the current IPO market sentiment, it appears highly likely that SEMIFIVE's market capitalization will exceed 1 trillion won on the day of listing.
The back-to-back listings of these two major companies have brought optimism to the VC industry. LIFESMED raised over 78.7 billion won in funding, starting with seed investment from LB Investment in 2011 and continuing through a pre-IPO round in February of this year. VCs that invested in LIFESMED include Timefolio Asset Management, Wonik Investment Partners, Mirae Asset Venture Investment, K2 Investment Partners, and Stonebridge Ventures.
There are also many VCs with high expectations for exits through SEMIFIVE's IPO. SEMIFIVE received investments starting in 2019 from Mirae Asset Venture Investment, among others, and has raised a total of about 240 billion won to date. Numerous institutional investors and VCs participated, including LB Investment, Korea Investment Partners, SBVA, and SV Investment.
Multiple Major IPOs Awaiting Next Year
Next year, several companies-including Musinsa, Goodai Global, Upstage, and Adell-are expected to seek IPOs.
Musinsa, a fashion platform company, has selected Korea Investment & Securities and Citigroup Global Markets Securities as its underwriters and has begun preparations for its listing. The market values Musinsa at 10 trillion won. Major investors include DSC Investment and LB Investment.
Goodai Global, which has grown rapidly by promoting popular beauty brands such as "Joseon Beauty" and "TIRTIR," is also planning to select an IPO underwriter soon. Its valuation has reached up to 10 trillion won due to its rapid overseas growth. Many private equity fund managers, including IMM Investment, Smilegate Investment, JKL Partners, and IMM PE, have joined in.
Exits in the bio sector are also anticipated. Adell, which is developing a treatment for dementia, recently signed a major deal worth 1.5 trillion won with global pharmaceutical giant Sanofi, demonstrating its technological competitiveness. The company is set to begin full-scale preparations for an IPO next year.
A representative from Stonebridge Ventures, which invests approximately 25% of its portfolio in the bio sector including Adell, said, "Adell, Ingenia Therapeutics, NexEye, and others are expected to enter full-scale exit mode next year, so we anticipate significant exits in the bio sector."
Mirae Asset Venture Investment's Results Become Tangible
As funds flow into the IPO market, Mirae Asset Venture Investment is attracting the most attention. Mirae Asset Venture Investment invested 3 billion won in LIFESMED's Series B round and holds a 1.06% stake. If LIFESMED achieves a market capitalization of 1 trillion won after listing, Mirae Asset Venture Investment is expected to realize a fourfold return on its investment.
Mirae Asset Venture Investment is also anticipating exit results through SEMIFIVE's IPO. The company invested a total of 36.3 billion won in SEMIFIVE over three rounds, holding about a 13% stake, making it the second-largest shareholder after U.S. semiconductor design company SiFive (17.69%). Mirae Asset Venture Investment is expected to recover at least 100 billion won through SEMIFIVE.
Investment recovery is also possible through the IPOs of Moloco and SpaceX, both of which are attracting global attention. Moloco, an AI advertising solutions company, is preparing to go public on NASDAQ next year, and Mirae Asset Venture Investment has invested 72.3 billion won in the company, its largest single-company investment. Mirae Asset Securities and Mirae Asset Venture Investment have also invested in SpaceX. At the time of investment, SpaceX was valued at 187 trillion won, but its valuation at the time of IPO is expected to reach as much as 2,200 trillion won. In this case, the value of the shares held by Mirae Asset is estimated to increase nearly tenfold.
Lee Joonseok, a researcher at Hanyang Securities, said, "With major portfolio exits by Mirae Asset Venture Investment set to begin in earnest next year, we expect to see multiple IPOs and investment recoveries happening simultaneously," adding, "It is also highly likely that operating profit will expand to levels approaching 100 billion won."
Capital Ready, National Growth Fund... Virtuous Investment Cycle Begins
The large-scale recoveries resulting from the successive IPOs of major investment companies are expected to provide strong momentum for a virtuous cycle in the domestic venture investment market. This is because the funds secured through exits can be reinvested into new funds, leading to further investments in promising companies. Typically, when forming a fund, VCs allocate a portion of their own capital as general partners (GPs), and if recoveries surge, they have greater capacity to increase their GP commitment ratios. A representative from a major VC said, "The prolonged IPO market downturn over the past two to three years has reduced VCs' ability to invest their own capital," adding, "With exits becoming more active recently, the foundation has been laid for recovered funds to flow back into the capital of large funds."
In addition, the government's ongoing efforts to establish the National Growth Fund are further raising expectations for market revitalization. As the National Growth Fund will serve as a central pillar and multiple private sub-funds are expected to be formed, a "virtuous cycle model" is likely, in which funds secured by VCs are reinvested as private contributions. The representative added, "If the government uses the National Growth Fund as a seed fund, GPs will be able to increase their commitment ratios with recovered funds and actively invest again."
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