With the forthcoming floatation of top South Korean e-tailer Coupang, SoftBank’s $100 billion Vision Fund is poised to have a new number one asset in its portfolio, furthering a turnaround that has seen the yo-yo fund from massive losses to record profit.
The $50 billion target valuation reported by Reuters this month will probably see the decade-old company exceed the recently listed US food supplier DoorDash Inc on a roster of assets that also includes stakes in ByteDance’s TikTok parent and Grab and Didi ride-hailers.
The Vision Fund built its 37 percent stake in Coupang for $2.7 billion, a person familiar with the matter said, largely at a $8.7 billion post-money valuation. The fund is not expected to sell shares in the initial public offering (IPO) that Coupang filed for in New York, the individual said, refusing to be acknowledged as not being public.
Coupang and SoftBank Group Corp declined to comment.
Achieving a $50 billion valuation will add to the fund’s good news, which is bouncing back from March’s annual loss. This month, led by the listings of DoorDash and home seller Opendoor Technologies Inc and the share price increase of ride-hailer Uber Technologies Inc, it reported a record quarterly profit.
In order to boost rapid growth, the fund has written large cheques for late-stage start-ups, with two-thirds of the valuation of its portfolio focused on 10 properties, including Coupang.
The 10 form 25% of British chip designer Arm – to be sold to Nvidia Corp pending regulatory approval – but do not engage in high-profile stumbles like WeWork, an office-sharing business.
The largest assets of the fund include its 22% interest in DoorDash, which has doubled its share price since the company’s December IPO, sending its market capitalisation to $65 billion.
SoftBank initially invested in Coupang in 2015, adding it before putting it under the fund to a stable of e-commerce hits that included 25 percent of China’s Alibaba Group Holding Ltd.
During stay-home policies, the e-tailer developed rapidly, while the COVID-19 pandemic forced other portfolio firms such as the Indian hotel chain Oyo to scramble to conserve cash.
Given its first-mover status and as it extends beyond replacing brick-and-mortar retail with a growing array of online outlets, analysts see Coupang’s $50 billion valuation as feasible.
It is South Korea’s largest e-tailer that manages inventory directly, with sales of about 21.7 trillion won ($19.62 billion) in 2020, shown by WiseApp info.
“The market’s assessment isn’t exaggerated,” analyst Park Eun-kyung at Samsung Securities said. “Coupang’s market leadership is a premium factor.”
