South Korean startup Watcha, operator of local over-the-top (OTT) media service provider Watcha Play, is wrapping up its pre-initial public offering (pre-IPO) funding round.

Watcha is in the midst of pre-IPO funding round worth 20 billion won ($16.5 million) to 30 billion won, according to sources on June 19. The startup is raising funds at a pre-IPO valuation of 130 billion won, highlighting the growth potential of the OTT market and its data-driven business model.

“The market’s reaction to the Watcha fundraising deal was not bad,” said an industry source. “The pre-IPO deal is expected to be completed soon.”

Founded in 2011, Watcha operates video streaming service Watcha Play. It now has 330,000 paying subscribers and aims to raise the number to 750,000 by the end of this year. The company plans to use the proceeds from the pre-IPO to secure paying subscribers with its plan to expand Watcha Play service to Japan.

Watcha has received approximately 23 billion won through four external fundraising rounds. The startup raised 800 million won in seed funding from K Cube Ventures in 2012. In 2013 and 2014 the company raised 2.7 billion won and 5.5 billion won in its Series A and Series B funding rounds respectively. Watcha also raised 14 billion won in its Series C funding round in 2018. A total of eight investors, including Doosan Group’s venture capital unit Neoplux, KT and blockchain investment company Hashed, participated in the 2018 funding round.

Watcha’s enterprise value (EV) in 2018 was estimated at 74 billion won. Considering the company’s EV for the latest pre-IPO transaction is 130 billion won, the value of Watcha has almost doubled over two years.

“Watcha’s revenue is increasing with the launch of various subscription plans and this has had a positive impact on the company’s EV,” an industry source said. “Currently, about 20 percent of its subscribers are using its premium plan.”

Watcha has reported an almost 100 percent year-on-year increase in revenue over the past few years. It recorded revenue of 5.3 billion won and 11.2 billion won in 2017 and 2018 respectively. It is estimated to have generated revenue of 22.7 billion won last year.

After the completion of its pre-IPO, Watcha plans to focus on its IPO. The company has hired NH Investment & Securities as its bookrunner, aiming to make its IPO debut in 2021 or 2022. (Reporting by Byung-yoon Kim)