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

Viva Republica, considered one of South Korea’s most beneficial fintech start-ups, is planning to boost as much as $1bn from worldwide traders within the second quarter to fund the growth of its tremendous app Toss and tackle SoftBank-backed rivals Seize and GoTo in south-east Asia.

The beginning-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 corporate has raised greater than $940mn in fairness funding up to now.

After venturing into Vietnam in 2019, the place it has attracted 3mn energetic customers with cash switch and debit card providers, the corporate is now pushing into 5 different international locations — Indonesia, Malaysia, Thailand, the Philippines and India — the place it can go face to face with Singapore’s Seize and Indonesia’s GoTo, two of the largest expertise firms within the area.

“We’ve by no means considered ourselves as a Korean market participant,” the corporate’s founder and chief govt Lee Seung-gun mentioned in an interview. “Our technique of rebundling as an excellent app could be very attention-grabbing to our traders.”

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

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

“Each fintech firm in world [markets] at all times needs to be a bundling [provider] of all options,” mentioned Lee, a 40-year-old former dentist. “We now have a extremely profitable playbook that we achieved in South Korea and we are attempting to imitate that success in that area.”

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

South Korean monetary firms have struggled to crack into abroad markets regardless of burning vital quantities of money. Home rivals Naver and Kakao Financial institution 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 aren’t going to be pouring tons of tons of {dollars} to change into primary. We are attempting to review clients’ ache factors and making an attempt to resolve that as nice as attainable,” mentioned Lee.

However 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 Seize and GoTo, which have constructed a strong fintech ecosystem on the again of sturdy ride-hailing information.

“They’ve an opportunity at cracking these markets in the event that they discover correct native monetary companions,” mentioned Lee Sung-bok, a researcher at Korea Capital Market Institute. “However there are already established native gamers there so it gained’t be simple for Toss to provide you with a contemporary service to beat them.”