Successful Toss Bank listing on track
Toss Bank, the mobile financial platform operated by Viva Republica, is expected to gain momentum by bringing on more attractive, large investors. Viva Republica has recently drawn 460 billion won ($404 million) in investments, with its corporate value soaring to 8.2 trillion won from 1.2 trillion won in 2018.
The investment will help the internet-only bank, which is set to launch in September, increase its capital. The capital increase will be a vital step for Toss towards operating a lending business that requires a loan-screening system, backed by a substantial amount of financial reserves.
Also moving forward is the prospect of the internet-only bank’s initial public offering (IPO) as early as 2023, preceded by a hefty capital increase in the first half of next year.
Part of the 460 billion won in investments will go to the internet-only bank and Toss Securities. The securities subsidiary was launched in March and has accumulated 3.5 million accounts since emerging as a leader in mobile trading
systems (MTS).
Toss Bank’s total capital stands at 250 billion won as of June of this year, which is the same amount initially drawn by its chief local rival, K bank, when it was launched in 2016.
Viva Republica has been under pressure over the financing of Toss Bank from the very beginning. This is evidenced by Viva Republica barely managing to obtain a preliminary approval from the Financial Services Commission (FSC) to run an internet-only bank in 2019.
This was done by lowering its stake in Toss Bank to 34 percent from 60.8 percent, after winning investments from Hana Bank, Hanwha Investment
&Securities, SC First Bank and K-Biz, an association of small- and medium-sized enterprises.
State-run Korea Development Bank (KDB) will invest 100 billion and Alkeon Capital Management 84 billion won. Part of the remaining amount is put up by some of Viva Republica’s existing investors, including Altos Ventures and Greyhound Capital.
The surge in Viva Republica’s corporate value to 8.2 trillion won in just three years illustrates that it could soon become Korea’s first “decacorn” or a privately-held startup whose corporate value is at least $10 billion. Viva Republica was Korea’s first fintech firm to become a “unicorn,” a privately-held startup with a corporate value of over $1 billion.
The quality most promising for investors is the fact that Toss Bank is a mobile financial platform that encompasses personal financial services, such as banking and securities trading, as well as B2C (business-to-consumer) and B2B (business-to-business) operations. Toss Bank was formerly Toss, a mobile money transfer app. It has about 20 million users.