Private equity firm JKL Partners will invest 40 billion won ($34 million) in Megazone Cloud Corporation, South Korea’s first Amazon Web Services partner and the domestic cloud market leader.

JKL Partners signed a stock purchase agreement to acquire redeemable convertible preference shares (RCPS) through a special purpose company, industry sources said on Friday (September 25). The deal comes after Midas Private Equity’s purchase of RCPS worth 7.2 billion won, and means Megazone Cloud has now raised 100 billion won in its series B funding round.

Megazone Cloud has been growing rapidly as cloud services market expand globally. It has gained the leading position in South Korea’s public cloud market since becoming an AWS partner in 2012.

The company, which recorded revenue of 209.6 billion won and an operating loss of 15.2 billion won in 2019, is expected to reach a break-even point soon.

Megazone Cloud’s existing investors include a consortium of Stonebridge Capital and KB Securities, NAU IB Capital, KB Investment and Korea Development Bank.

The JKL Partners deal valued the company at 600 billion won. Investors that participated in the latest fundraising are likely to hold approximately 15 percent of common shares of Megazone Cloud when they are converted. Financial investors anticipate they will fund the company’s expansion into overseas markets and seek profit-taking opportunities.

“Megazone Cloud has successfully finished its fundraising by securing financial investors like JKL Partners and Stonebridge Capital in its series B funding round,” said an industry source. “The company’s enterprise value may increase sharply, given its positive growth potential.”

JKL Partners has struck the new deal five months after it completed its investment in Yulgok, the country’s largest aerospace and defense spare parts supplier. (Reporting by Ik-hwan Choi)