Hardly anyone outside South Korea had heard of Coupang, South Korea’s largest e-commerce company, until news of its initial public offering on the New York Stock Exchange dominated business news headlines across the world. The Family Office had invested in Coupang in 2017 on behalf of its clients, long before it became a household name on Wall Street.
The Coupang Story
Founded in 2010 by a Harvard Business School dropout, Coupang has overseen the transformation of South Korea into one of the world’s fastest growing online shopping markets. Coupang came to dominate South Korean e-commerce by providing free “next-day,” “same-day” and “dawn” delivery of groceries and millions of other items through its “Rocket Wow” program.
But the success did not come overnight. Long before cardboard boxes were replaced with reusable bags and products could be returned by leaving them outside customer doors to limit the inconvenience of online orders and returns, Coupang had made huge investments in last-mile logistics centers nationwide and built the largest delivery fleet in the country. 70% of South Korea’s population live within seven miles of a Coupang delivery center. By the end of 2020, Coupang had more than 15,000 full-time drivers ready to deliver anything customers need speedily.
Lydia Jett, a partner at Softbank Vision Fund Investment Advisers, attributes the amazing success story of Coupang to its customer centricity, massive delivery network, and innovation.[I]
Quarterly revenues grew from US$0.9 billion in Q1 2018 to US$3.8 billion in Q4 2020. 2020 revenues increased 90.7% to $11.97 billion. Net losses continue to be an issue due to the costly investments in delivery and logistics. However, net losses dropped from US$1,097.5 million in 2018 to US$474.9 million in 2020 according to Coupang, Inc. IPO Investment Prospectus S-1. [ii]
The Debut on NYSE
According to CNBC, Coupang raised $4.55 billion through 130 million shares at $35 per share in the largest U.S. IPO in 2021 and among the top 25 largest U.S. listings of all time, valuing the company around $60 billion compared to $9 billion in November 2018. The share price has increased 44% since the IPO to reach $51 on 11 March 2021 after peaking to almost $64.
In an interview with CNBC, Coupang CEO, Bom Kim, highlighted that investors have always been aligned on the long-term strategy of building real value for customers. The money raised through the IPO will be invested in technology, namely the “dawn delivery” service, Fintech and robotics.[i]
The Investment of The Family Office in Coupang
In an interview on Al Arabiya[ii], Abdulmohsin Al Omran, CEO and founder of The Family Office, spoke about the decision to invest in Coupang alongside the BlackRock consortium in 2017 on behalf of its clients, before it became the number one player in South Korea. The decision was based on the commitment of Coupang to invest in technology and infrastructure over the long term and its customer centric culture, delivering a superior customer experience.
The investment philosophy of The Family Office entails investing in promising opportunities across the world, like Coupang, to build diversified portfolios that protect and grow customers’ wealth while limiting downside risk.
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Disclaimer: The Family Office Co. BSC (c) is a Category 1 Investment Firm regulated by the Central Bank of Bahrain C.R. No. 53871 dated 21/6/2004. Paid Up Capital: US$10,000,000. The Family Office Co. BSC (c) only offers products and services to ‘accredited investors’ as defined by the Central Bank of Bahrain.