SoftBank-backed Coupang raises $4.2 billion in US IPO

Coupang LLC, South Korea's largest e-commerce company, raised $4.2 billion in the biggest share offering in the United States this year after selling stocks in the IPO above its deal target range, people familiar with the matter said.

The initial public offering price of $35 apiece, higher than the marketing range $32-$34 per share, gives Seoul-headquartered Coupang, which is backed by Japan's SoftBank Group Corp , a market value of $60 billion.

The company declined to comment.

Coupang's successful share offering comes as the US IPO market is at its strongest in more than two decades and investors are flocking to buy shares in technology companies that have benefited during the COVID-19 pandemic.

The IPO is the biggest in the United States this year, surpassing the $2.15 billion raised by dating app Bumble Inc . It also marks a jump in Coupang's valuation, which was pegged at $9 billion in a fundraising round in 2018, according to Pitch book.

Analysts in South Korea said the strong response to Coupang's offering was a result of its market-leader position in the country at a time when, like many other e-commerce firms, its sales have grown due to the COVID-19 pandemic.

"Considering the high level of valuation inherent in the pricing, the market is giving a generous assessment of the company's achieving the top spot in market share," said Park Sang-joon, analyst at Kiwoom Securities.

Coupang was the top-ranked South Korean e-commerce firm in 2020 with 19.2% market share, according to Euromonitor, compared to Naver Corp's 13.6% and eBay Korea's 12.8%. It was the 10th largest e-commerce firm in the world, based on retail value excluding sales tax.

In 2020, Coupang's net sales jumped 91% year-on-year to $11 billion. Net losses narrowed to $567.6 million from $770.2 million posted in the prior year.

Founded in 2010 by Korean-American billionaire Bom Suk Kim, Coupang rose to prominence after launching its guaranteed same-day or next-day delivery service in the East Asian country. SoftBank's $100 billion Vision Fund owns 35.1% of Coupang.

Achieving a $60 billion valuation would add to good news for the Vision Fund, which is bouncing back from an annual loss in March. Last month, it announced record quarterly profit.

The company's shares will begin trading on the New York Stock Exchange on Thursday under the symbol "CPNG."

Goldman Sachs, Allen & Co, JPMorgan and Citigroup are the lead underwriters for the offering.