South Korean financial “super app” Toss valued at $7.4bn in latest funding

Viva Republica, the Seoul-based FinTech company operating mobile financial app Toss raised $410m in fresh funding, which values the company at $7.4bn.

It bagged the funding from the country’s state lender Korea Development Bank and US investor Alkion. The latest round was also joined by its existing investors including Altos Ventures and Greyhound Capital.

Viva Republica, which hit unicorn status in 2018, has now raised more than $940m in equity funding.

With new funding, Toss is looking to expand its Southeast Asian presence beyond Vietnam. It plans to enter another country in the second half of this year and several more starting next year.

Having started as a money transfer service, it offers online payment processing for merchants and securities investments. The company plans to launch Toss Bank, a neobank, in September 2021, which it describes as “the final key component” of its super app strategy.

As a financial super app, Toss Bank will be able to supplement information from South Korea’s main credit rating agencies with its own data about user transactions: for example, where do they spend money, how often do they spend, their cash flow and balances.

CEO SG Lee said, “Instead of gathering users haphazardly, users recognise this as a financial app, solving financial issues… It ends up making a huge difference in revenue per user.

“Now that Toss is a direct player in the major financial sectors such as banking and brokerage, we will redesign financial services and products from the customers’ viewpoint.”

The $7.4bn valuation stems from fast growth at Toss, which has 20 million users, or more than one-third of the 51.8 million Korean population. That is up from just 370,000 when the service first launched in 2015.

Its investment service, called Toss Securities, attracted 3.5 million users in the three months since launching in March – Viva Republica said, buoyed by hot retail interest in stock investments.

Its app for the Vietnam market, Toss Vietnam, has gathered 3 million monthly active users as of this month, up from 1 million in March, after beginning as a reward app in 2020. It offers services such as money transfer and debit cards. Its revenue totalled 390bn won in 2020 and is expected to surpass the 1tn won mark this year.

Viva Republica expects to have a concrete plan to start an IPO process within three years and is open to various listing venues including the United States or South Korea, Lee said.

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