Dunamu to go global via its NFT venture with HYBE

Finance

Published: 14 Dec. 2021, 19:11 Updated: 15 Dec. 2021, 14:44

Dunamu to go global via its NFT venture with HYBE

Dunamu management answers questions during an online press briefing held Tuesday on the Dunamu-developed metaverse platform 2ndblock. From left, Lim Ji-hoon, chief strategy officer; Nam Seung-hyeon, chief financial officer; Kim Hyoung-nyon, executive vice president; and Lee Sirg-oo, CEO. [DUNAMU]

Dunamu has global ambitions and plans to leverage off its relationship with HYBE to extend its reach abroad, according to CEO Lee Sirg-oo, especially in terms of non-fungible tokens (NFT).

A Nasdaq listing is not planned at this point, though the company has been approached by bankers pitching the idea of a public offering on the U.S. market.

"As much as we have received strong interest locally, we hope to grow into a well-recognized company in the global market as well," Lee said Tuesday as he introduced the company's 2ndblock metaverse, which is in beta testing. "An important step will be the scheduled launch of a joint venture with HYBE in the United States next year."

Dunamu last month agreed to swap shares with HYBE, the company behind boyband BTS, and form a joint venture that will develop and issue NFTs based on HYBE-managed artists, like NFTs of BTS photo cards.

During Tuesday's briefing, Lee said that the venture will be established in the United States, where the NFT market is already established and the fan bases for HYBE-managed acts are sizeable.

NFTs are unique, irreplaceable and irreproducible digital objects that represent the digital ownership of real-world assets, such as artwork, music and video game items that are offered in limited quantities. The tokens are backed by blockchain technology to give buyers proof of ownership. Trading of NFTs is currently less regulated than the trading of cryptocurrencies, as global guidelines have yet to be established.

Lee said the company's global expansion has long been limited because local banks wouldn't wire local funds to international markets. The banks didn't explain, but Dunamu operates the Upbit cryptocurrency exchange, and crypto often raises compliance issues.

Through the joint venture with HYBE, it can have an international presence despite the restrictions it currently faces.

"It's a pity that international transfers are still not possible," Lee said. "We've always wanted to go global as soon as possible, but as our assets cannot be transferred, we've missed many opportunities already."

"I think entering the U.S. market with the joint venture with HYBE will be somewhat of a breakthrough for us," Lee said.

According to a spokesperson from Dunamu, founding a joint venture in the United States obviates the need to wire money.

Dunamu is hoping to grow its NFT business to become as large as its cryptocurrency trading business and achieve synergies with its 2ndblock metaverse platform, released in beta at the end of November.

According to Lim Ji-hoon, chief strategy officer at Dunamu, 2ndblock and the Upbit NFT trading platform for NFTs, released in beta on Nov. 23, could be linked.

"Users on 2ndblock can exhibit NFTs in the metaverse space, and based on these NFTs, people with similar interests can gather and create an online community within the metaverse," Lim said. "In 2022, we will focus on offering stable services both on our NFT trading platform and metaverse platform and experiment with various use cases that can help boost synergies between the two platforms."

Despite grand ambitions, Dunamu did not detail businesses that will be offered by the Dunamu-HYBE joint venture.

Lee said as the company expands its trading business, it hopes to support trading of physical assets as well. While Dunamu confirmed Tuesday that it has founded a subsidiary dedicated to operating a reselling platform for used luxury watches, called Viver, specific business plans have not been crafted yet.

Lee said that nothing has been confirmed regarding a possible initial public offering in the United States, though the company is studying its options.

"After Coupang's U.S. listing and also the listing of Coinbase on Nasdaq, there were media reports that Dunamu should list on Nasdaq," the Dunamu chief said. "At the time, frankly speaking, we had no plans, but as media reports made it seem like we are definitely headed to Nasdaq, some investment banks and accounting firms approached us for meetings."

Lee said he had meetings with interested investment banks, but the company has not yet finalized on its listing plans, adding that when decisions are made he will make an announcement.

Dunamu grew fast as young Korean investors swarmed to trading cryptocurrencies this year.

Upbit had an accumulated 8.9 million users as of October, up roughly three-fold on year. Customer deposits handled by Upbit total roughly 53 trillion won ($44.8 billion).

This year through the end of the third quarter, Dunamu posted 1.99 trillion won in net profit, compared to 57.2 billion won net profit full-year 2020.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]