South Korean P2P tech heats up with VC investors
Kleiner Perkins and Ribbit Capital led an $80 million funding round in Viva Republica, the South Korean maker of the popular P2P payment app Toss.
The round boots Viva Republica's valuation to $1.2 billion, making it a "unicorn," or a privately held company with a valuation of $1 billion or more.
The raise comes on the heels of the previous round that was held only six months ago (June) when Toss raised $40 million with PayPal and Sequoia Capital China participating as key investors.
Viva Republica was founded in 2013 and then launched the Toss payment app in 2015 as a way to improve payments and banking efficiency in Korea. The CEO and co-founder, SG Lee, is a former dentist who recognized an opportunity to make payments and banking services much simpler. Despite South Korea having very high smartphone penetration rates, Mr. Lee felt the ability to transfer funds was overly complicated.
Today, Toss is one of South Korea’s leading P2P payment apps, processing $1.4 billion in monthly P2P transfers and is operating at a $17 billion annual run rate. While Toss often compares itself to Venmo, its payment volume is still significantly smaller as Venmo reported $32 billion in transfers in the second quarter of this year.
In addition to P2P transfers, Toss offers a number of features to its more than 8 million registered users. These include personal financial management tools and banking services such as branded e-payments for online and mobile shopping, credit score management, a financial dashboard of a user’s complete set of bank accounts, a savings account with an attached debit card and investments.
Toss is not alone in the Korean market; its arch rival, the Kakao messaging app, also has a competing service called Kakao Pay. In 2017 Ant Financial invested $200 million in Kakao Pay as the Chinese firm flexes its muscles into local payment schemes. In that same year Toss raised $48 million from investors including PayPal.
According to Crunchbase, a website that tracks investment in fintech startups, Viva Republica has raised over $197 million in six funding rounds since 2014.