Maria Montero

Toss payment service becomes the new unicorn …

South Korea has Its third unicorn startup after Viva República, the company beyond popular payment app Toss, announced that it raised a round of $ 80 million with a valuation of $ 1.2 billion.

This new round is led by the American firms Kleiner Perkins. and Ribbit Capital, both of which reduced their first checks to Korea with this deal. Other participants include existing investors Altos Ventures, Partners of Bessemer Venture, Goodwater Capital, KTB Network, Novel, PayPal and Qualcomm Ventures. The deal comes just six months after Viva República raised $ 40 million to accelerate growth, and brings the company to nearly $ 200 million raised by investors to date.

Shake It was started in 2013 by former dentist SG Lee, who was frustrated by the awkward way online payments worked in Korea. Despite the country having one of the world’s highest smartphone penetration rates and a prominent credit card user, the process required more than a dozen steps and came with limits.

“Before Toss, users required five passwords and around 37 clicks to transfer $ 10.” With Toss users they only need one password and three steps to transfer up to 500,000 KRW ($ 430), “Lee said in a previous statement. .

Working with traditional finance.

Currently, Viva República claims to have 10 million registered users for Toss, that is, 20 percent of Korea’s 50 million people, while saying it is “on track” to reach an execution rate of $ 18. billion for transactions in 2018.

The application started as Venmo. In the style of payments, but in recent years it has added more advanced features focused on financial products. Toss users can now access and manage credit, loans, insurance, investments, and more than 25 financial service providers, including banks.

Fintech startups are “starting and starting over” in the West, like challenger banks in Europe, but in Asia the approach is more collaborative and supportive. A large number of startups have found a sweet spot between banks and consumers, helping to bring the two together selectively and intelligently. In Toss’s case, it essentially acts as a funnel to help traditional banks find and screen clients for services. Therefore, Toss is graduating from a peer-to-peer payment service to a banking gateway.

“Korea is a global top 10 economy, but there is no Mint or Credit Karma to help people save and spend money smartly, “Lee told TechCrunch in an interview.” We saw the same deep problems that we need to solve [as the U.S.] so we’re just digging. “

“We want to help financial institutions build on Toss … we are building an Amazon for the financial services industry, ”he added. “We try to add all those activities, which cover savings accounts, loan products, insurance, etc.”

Former dentist SG Lee started Toss in 2013.

Lee said the plan for the new money is to go deeper into Korea by advancing technology beyond Toss, adding more users and, on the supply side, partnering with more companies to offer financial products.

There is a lot of competition. Startups like PeopleFund focus directly on financial products, while Kakao, Korea’s largest messaging platform, has a dedicated fintech division, KakaoPay, which competes with Toss in both payments and financial services. It also has the mighty Alibaba in its corner, courtesy of a $ 200 million investment from its Ant Financial affiliate.

Alibaba and Tencent tend to move in pairs as opposites, one of them naturally gravitating towards the rivals of the other’s investees as happened recently in the Philippines. However, it is complicated in Korea. Tencent is stuck in limbo as he is a former Kakao supporter. But could the Ant Financial deal spur Tencent to work with Toss?

Lee said his company has a “good relationship” with Tencent, including occasional house / home visits, but right now there is nothing else to do. That is intriguing.

Expansion plans abroad.

Also of interest are future plans for the business now that it is taking significantly more capital from investors who, even with the most patient money, eventually need a return on their investment.