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Kurly, the Korean grocery startup, raises $200M on a $2.2B valuation after shifting IPO plans away from the NYSE

Online grocery startups around the world continue to pull in major investment, underscoring how much they have all grown — especially in the last year of pandemic living. In the latest development, Kurly -- a startup in South Korea that provides next-day grocery delivery services across the country -- has closed $200 million in funding, a Series F valuing the company at $2.2 billion, the company confirmed.

This means the company's valuation has more than doubled in the last year. Last April, Kurly closed a Series E of $150 million at a $780 million valuation.

This latest round is being co-led by Aspex Management, DST Global, Sequoia Capital China and Hillhouse Capital -- all previous backers of the company -- with new investors Millennium Management and CJ Logistics Corporation also participating. CJ Logistics is a strategic backer: It has a deal in place with Kurly to help expand its overnight delivery service to more regions across South Korea.

This latest funding comes right on the heels of a significant U-turn for the business in recent days.


Kurly had been planning an IPO in the U.S. later this year; instead it announced this week that it would instead seek to list in its home market instead.

"Kurly had explored both overseas and domestic IPO options. After reviewing detailed conditions such as its business model and stock market conditions both at home and abroad, Kurly has decided to go ahead with an initial public offering in the Korean stock market," it said in a statement to Korea Economic Daily.

Some have reported that Chinese transport giant Didi's rocky start as a public company on the NYSE this month gave Kurly pause on the performance of Asian companies on U.S. exchanges at the moment. Others have reported that the company was facing issues with some existing private backers wanting to cash out, concerned over the company's growth potential -- which might have hastened an IPO while also putting more pressure on the company to produce better returns.

It's worth noting too that Coupang, Kurly's much bigger rival, is traded in the U.S. market, on the NYSE after going public earlier this year. Its market cap is currently just under $70 billion and so that might also invite unfavorable comparisons.

Whatever the reason for the shift, this latest round is an interesting signal to the market that investors are keen to continue supporting the company on the back of more market potential. Kurly said the funds will be used to build out its tech stack, talent recruitment, and to expand its coverage of its next-day services.

"This funding round is a testament to Kurly’s contributions in transforming customer’s everyday habit of conducting grocery shopping at physical stores into a more convenient way of shopping online by offering a superior selection of products through its innovative delivery service," said Seul-A Kim, also known as Sophie Kim, the CEO and founder of Kurly, in a statement. "The company has also been successful in bringing merchandises to the customers at a reasonable price through service technology empowered by the use of its proprietary data analytics. We are delighted to have new capital which would allow us to further invest in logistics infrastructure, people and technology to continue to innovate mobile grocery market and improve lives of consumers, producers and workers."

The company has been growing at a strong pace, with $845 million in sales in 2020, up 124% over a year ago. It hasn't disclosed whether it is profitable or what its operating margins are, but the theory is that -- as with all e-commerce operations -- as Kurly continues to scale its overnight delivery service, those margins will improve.

"We are excited to continue to support Market Kurly with our investment," said Hermes Li, the founder and portfolio manager of Aspex Management, in a statement. "Korea is one of the fastest growing and largest e-commerce markets globally, and Kurly has been the leader in e-Commerce innovation. They have built a consumer-centric brand focused on superior product quality and user experience. We believe there is significant potential ahead of Kurly from expansion into other consumer categories and new geographies. Aspex is looking forward to many years of growth with Kurly."

Online grocery delivery services have seen a massive surge of use and subsequent investor attention in the last year, fueled by people turning to e-commerce in the wake of social distancing to help contain the spread of COVID-19. That's included a lot of funding for large grocers similar to Kurly, as well as smaller, "instant" essential grocery players targeting urban consumers, who have collectively raised hundreds of millions of dollars to scale their operations in what has quickly become a very crowded market.