South Korea’s mid-sized private equity firm SG Private Equity (SG PE) has invested in Eximbay, the country’s largest inbound online payment service provider.
SG PE has recently invested a combined 7.5 billion won ($6.2 million) to acquire redeemable convertible preference shares and convertible bonds issued by Eximbay, according to sources on July 13. The PE firm will also acquire part of a stake in the company owned by chief executive Kim Joon-hun for 1.5 billion won.
SG PE will become the second largest shareholder of the company with a 28.2% stake, when they are converted into ordinary shares. The PE firm has made the investment amid the rapid growth of online shopping and the company’s solid financial performance despite the Covid-19 pandemic.
Founded in 2010, Eximbay is an online payment service platform provider which specializes in the inbound online direct purchase market, where overseas shoppers directly purchase goods via Korean shopping malls. The company has partnered not only with leading payment companies like Visa, Mastercard, PayPal and Alipay, but also with global payments platforms including Russia’s Yandex, Malaysia’s MOLPay and Thailand’s Paysbuy to provide customers with comprehensive payment solutions.
Eximbay’s revenue has increased by 1.6 times from 12.2 billion won in 2016 to 19.1 billion won in 2019. The company’s operating income has risen by more than eight times to 2 billion won over the same period. Last year, its operating margin exceeded 10% for the first time. Despite the Covid-19 pandemic, Eximbay recorded revenue of 4.2 billion won and operating income of 200 million won in the first quarter of 2020, up 22% and 173% compared to a year ago as more foreign customers directly bought goods via Korean online shopping malls.
SG PE aims to eventually carry out an initial public offering of the company. According to data from Statistics Korea, the transaction value of overseas shoppers’ direct purchases from Korean online shopping malls has increased by 10 times to almost 6 trillion won in 2019 from 679 billion won in 2014. (Reporting by Se-hun Jo)