South Korean super app Toss takes on SoftBank-backed Grab in south-east Asia

Viva Republica, certainly one of South Korea’s most useful fintech start-ups, is planning to boost as much as $1bn from worldwide buyers within the second quarter to fund the enlargement of its tremendous app Toss and tackle MushyBank-backed opponents Grab and GoTo in south-east Asia.

The start-up, backed by Singapore’s GIC, PayPal and Sequoia Capital China, raised $410mn in June at a valuation of $7.4bn and is in search of one other spherical of funding earlier than launching an preliminary public providing. The firm has raised greater than $940mn in fairness funding up to now.

After venturing into Vietnam in 2019, the place it has attracted 3mn lively customers with cash switch and debit card companies, the corporate is now pushing into 5 different nations — Indonesia, Malaysia, Thailand, the Philippines and India — the place it’s going to go face to face with Singapore’s Grab and Indonesia’s GoTo, two of the largest know-how corporations within the area.

“We’ve never thought of ourselves as a Korean market player,” the corporate’s founder and chief govt Lee Seung-gun mentioned in an interview. “Our strategy of rebundling as a super app is very interesting to our investors.”

South Korea’s fintech market is increasing on account of deregulation within the sector and a rising variety of tech-savvy younger shoppers. Toss has 1.1mn month-to-month lively customers in South Korea, in response to Lee.

Viva Republica’s gross sales greater than doubled final 12 months to Won880bn ($721mn), with its tremendous app Toss producing income from a set of economic companies together with on-line banking, inventory buying and selling, and insurance coverage.

“Every fintech company in global [markets] always wishes to be a bundling [provider] of all features,” mentioned Lee, a 40-year-old former dentist. “We have a really successful playbook that we achieved in South Korea and we are trying to mimic that success in that region.”

Lee Seung-gun
Viva Republica’s chief Lee Seung-gun: ‘We’ve by no means considered ourselves as a Korean market participant’ © Jean Chung/Bloomberg

In Vietnam, Toss is including greater than 500,000 lively customers each month to realize floor on native rival MoMo, which boasts about 78mn registered customers. Toss is providing bank card companies and short-term loans in partnership with regional banks.

South Korean monetary corporations have struggled to crack into abroad markets regardless of burning important quantities of money. Domestic rivals Naver and Kakao Bank are additionally battling to make inroads into south-east Asia however Lee harassed that his firm is taking a focused strategy, specializing in credit score evaluation and deep analysis on client behaviours.

“We are not going to be pouring tons of tons of dollars to become number one. We are trying to study customers’ pain points and trying to resolve that as great as possible,” mentioned Lee.

But analysts say Toss’s push into south-east Asia is more likely to be an uphill battle, given the presence of sturdy native gamers and Grab and GoTo, which have constructed a strong fintech ecosystem on the again of sturdy ride-hailing information.

“They have a chance at cracking those markets if they find proper local financial partners,” mentioned Lee Sung-bok, a researcher at Korea Capital Market Institute. “But there are already established local players there so it won’t be easy for Toss to come up with a fresh service to beat them.”

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