Webtoon Entertainment, a prominent online comics platform, has priced its US initial public offering at the top of its marketed range, valuing the company at $2.7 billion. The Los Angeles-based company, controlled by South Korean web portal giant Naver, announced on Wednesday that it will sell 15 million shares at $21 each, raising $315 million. Trading is set to begin on the Nasdaq on Thursday.
The company, which boasts approximately 170 million monthly active users across more than 150 countries, is a testament to South Korea’s booming cultural export industry. Webtoon Entertainment’s main markets, South Korea and Japan, account for 27% of its global readership. With the popularity of webtoons growing, especially as sources of inspiration for TV dramas, the IPO has attracted significant investor interest. BlackRock, the world’s largest fund manager, has indicated its intention to purchase up to $50 million worth of shares.
Im Hee-seok, an analyst at Mirae Asset, has expressed optimism about the US listing, citing the industry’s explosive growth in recent years. However, the company faces challenges, including slowing revenue growth rates post-pandemic.
Founded in 2005, Webtoon Entertainment reported a net loss of $145 million on revenues of $1.28 billion last year. After the IPO, Naver will maintain a 63.4% stake, while Tokyo-based LY Corporation will hold nearly 25%. Despite the potential of the IPO, analysts caution that it might not significantly boost Naver’s shares due to ongoing data sovereignty issues between South Korea and Japan.
Webtoon Entertainment offers its services in 10 languages, including English, Korean, Japanese, French, Spanish, and German. In 2021, Naver expanded its reach by acquiring Canadian web novel platform Wattpad for $600 million. This strategic move aims to tap into Wattpad’s 89 million users and further solidify Webtoon Entertainment’s global footprint.
The IPO was managed by Goldman Sachs, Morgan Stanley, JPMorgan Chase, and Evercore, signaling strong financial backing for Webtoon Entertainment’s ambitious growth plans. As the company ventures further into international markets, it is poised to capitalize on the rising global demand for digital comics and related entertainment content.
