South Korean e-commerce platform Tmon Inc will raise 400 billion won ($337 million) from local private equity firm PS Alliance, industry sources said on September 2.
Tmon is controlled by Monster Holdings LP, a special purpose company whose largest shareholders are KKR & Co and Anchor Equity Partners. Another special purpose company will be established to issue convertible bonds worth 400 billion won to PS Alliance, and the proceeds will be injected into Tmon through a private placement of new shares. The deal is expected to be completed in October.
Tmon is looking for a public listing on the South Korean stock exchange by 2021, with Mirae Asset Daewoo recently hired to lead the offering. PS Alliance is said to intend to convert bonds into equity after the planned listing, targeting a return of 15%. The deal reportedly includes clauses that mandate Tmon to list its shares within a certain period of time. Convertible notes bought by PS Alliance will mature in three years.
Tmon will use the money raised from the deal to improve its financial position and further grow. It has recently focused on so-called Time Commerce, a marketing concept that relies on selling products at bargain prices during certain hours, to increase its membership.
Tmon has improved its inventory management and increased its focus on profitability. It is also expected to benefit from the Covid-19 pandemic, which has boosted online sales.
Founded in 2010 as the country’s first social commerce provider, Tmon transformed itself into a leading ecommerce platform. It recorded more than 11 million active users during the three months from April to June, making it the fifth largest among industry players. However, it is still struggling to make profits due to cut-throat competition in the fragmented market.
According to the latest data, Naver Shopping, the online shopping unit of internet giant Naver Corp, had the largest market share with about 13% on a revenue basis, followed by Coupang with 10%, eBay Korea with 8% and Tmon with 2%. (Reporting by Ar-rum Rho)