WeMakePrice raises 120 billion won

Cash-strapped e-commerce start-up WeMakePrice raised 120 billion won ($100 million) and plans to use the funding to shore up its finances and scale up its retail business.

WeMakePrice said on Tuesday that Wonder Holdings, its parent, attracted the investment from IMM Investment, a local private equity firm, in exchange for a 4.28 percent of its shares.

The announcement came after Nexon pledged to invest a total of 350 billion won in September. Of that, 250 billion won has been transferred to the start-up.

“We have brought in a total of 370 billion won of investment only for the second half of this year,” the company said in a statement.

“The funding has let the company claw its way out of the state of capital impairment and allow for investment for further expansion,” it said.

Impaired capital is a balance sheet condition where a company’s total capital becomes less than the face value of its capital stock.

The funds will be used mainly to strengthen sales channels.

“In essence, WeMakePrice is close to a retail company,” the spokesperson said,

“And the key to a retail company’s success comes from the competitiveness of the products it sells.”

He went on to note that the start-up will strengthen merchandisers and use the funding and attract more sellers, ranging from independent designers, shops and middlemen in a supply chain.

The e-commerce player has struggled to turn a profit in the face of cutthroat competition with rivals including Coupang, 11st and TMON.

“We will take the lead in the e-commerce market by swiftly injecting investment into the sectors in need of the funding,” said Park Eun-sang, head of WeMakePrice in a statement.

“We will make investments into partnered sellers to get an upper hand in price competition,” Park said.

WeMakePrice experienced a sales drop but managed to reduce losses.

In 2018, it generated 429.4 billion won in sales, down 9 percent. Its operating loss was 39 billion won, 6.4 percent lower than in 2017. The volume of transactions grew 28.6 percent to 5.4 trillion won in 2018.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]