Rosy outlook for South Korean fintech IPOs in 2025

The South Korean fintech industry, which bloomed a decade ago, is poised to take the next step for the coming 10 years after prominent players began generating profit this year, boding well for their much-anticipated public listings.

Founded in 2013, Viva Republica Inc., operator of Korea’s leading finance super app Toss, reported its first-ever quarterly net profit of 3.9 billion won ($2.7 million) in the third quarter of this year, according to the Korean fintech industry on Monday.

The gain was driven by a turnaround in the earnings of its core units — Toss Bank, Toss Securities and Toss Insurance — after years of generating losses.

Its archrival Kakao Pay Corp. also reported profit for two consecutive quarters after logging its first-ever quarterly profit in the first quarter of this year.

Their smaller crosstown peers are also poised to snap their losing streak.

Launched in 2013, BankSalad Co., operator of a money management platform called BankSalad, reached a monthly break-even point last month, while loan comparison platform operator Finda Inc. swung to a monthly profit in July and August.

Finda is expected to post a quarterly profit in the fourth quarter of this year after cutting selling, general and administrative expenses (SG&A) in the first three quarters by 24% from a year ago while improving revenue over the same period, said Finda co-Chief Executive Lee Hyemin.

REVIVED APPETITE FOR KOREAN FINTECH IPOS

A recovery in earnings is expected to revive the market’s appetite for their delayed listings, market analysts said.

Viva Republica and BankSalad have been touted for their innovative financial services but have failed to prove their value financially after bleeding for years after their service launch.

Starting as an online payment app operator, Viva Republica has grown into a Korean fintech giant operating a mobile fintech platform which offers a wide range of financial services, from online banking to securities, insurance and financial advisory services.

Despite its rapid ascent, the Korean fintech unicorn has suffered a string of losses. It logged a cumulative loss of 773.2 billion won from 2021 to 2023.  

With its enhanced financial performance, Viva Republica plans to go public next year at the earliest, anticipating a better valuation.

According to an exclusive report by The Korea Economic Daily in October, Viva Republica will seek a listing on the US market, either the Nasdaq or the New York Stock Exchange (NYSE), in the second half of next year or early 2026.

It originally planned a listing at home but dropped the plan due to a lack of enthusiasm for fintech IPOs, which could end up having poor valuation given the lack of comparable fintechs in Korea.

Given the better investment sentiment toward fintechs in the US, Viva Republica sees a stronger valuation opportunity overseas, people familiar with the matter said.

The enterprise value of Viva Republica is estimated at between 10 trillion won and 20 trillion won.

BankSalad and Finda will closely watch Viva Republica’s IPO journey as they are also keen to kick off their IPO process after they turn around.

As Korean fintechs play a bigger role in bridging traditional financial institutions and consumers, their profitability is expected to keep improving on the back of growing demand for their unconventional financial services for traditional financial products.

Write to Hyeong-Gyo Seo at seogyo@hankyung.com
Sookyung Seo edited this article.