Lee Seung -Gun – or “SG” for foreigners who did not know Korean pronunciation – has a history of classical startup founder who mixes tenacity, repeated failure, ultimate success … and dental care.
It started in 2011, when Lee left a private hospital belonging to Samsung to start Viva Republica. “I started as a dentist, like all other Asian children whose parents want their children to be neurosurgeons or dentists,” he said, laughing.
“When I was 29 or 30 years old, I did not dream. I just wanted to be a famous dentist, ”he recalls. But he quickly agitated by helping people on an individual scale. “To create a large -scale impact, I quickly realized that I had to focus on technology.”
Its thrust in entrepreneurship experienced a difficult start. He devoted 150 million won to savings – around $ 105,000 – his new business was discovered. “During the first five years, I failed eight times,” he said. He triggers some of what he calls “waste ideas”: social media, a voting application.
A Bloomberg report From 2018, noted that a point, Lee had only 20,000 won ($ 14) at the bank and pleaded with the families of employees to let them continue to work without salary.
Then he found an idea that worked: a money transfer service. “The launch was another stupid idea, but we were crazy enough to do it, because we had nothing to lose,” he said with a smile. “And we are there.
Almost 15 years after its foundation in 2011, Tock is now part of a greater “super application” Fintech, a single platform that combines banking, insurance, stocking and money transfer services.
South Koreans have an average of five bank accounts and four credit cards – which means many different financial accounts in Jongler. Lee thinks that this is why Tock turned out to be so popular, because Koreans have “more opportunities to check their finances”.
Viva Republica is now one of the most eminent startups in Korea, worth around 7 billion dollars after a round of funding in 2022. The company has donors like GIC, PayPal and Qualcomm Ventures. Lee has also become one of the new billionaires in South Korea, according to an estimate of 2021 of Forbes.
The launch platform claims to have nearly 30 million registered users, which would be around 60% of the population of South Korea. More than half of the 25 million monthly active users of the company visit the application at least 10 times a day.
“Our monthly active user base is actually a bit shy from that of Instagram [in Korea]He boasts.
Super-ApPor success
Asia is covered with super-applies, where platforms like Tencent’s WeChat include services such as messaging, payments, food delivery, news, and more. Finance is a popular service for budding super-applies, even for unlikely companies, with the Singapore socket and sea, and the Goto of Indonesia among Asian platforms with Fintech divisions.
Super applications keep users on a single platform, rather than sending them to another business. This allows a cross promotion, the sharing of resources and other supports between various services. It is also more difficult to switch to another platform: if everything you need is on an application, why do you try something else?
However, super applications have not taken off in the West, even if the model wins fans like the owner of X Elon Musk, who hopes to transform his network of social media into a financial service platform.
Lee’s theory is that super applications are better suitable for the Asian Internet, which initially lacked a large part of the digital infrastructure that underpins American startups.
In the United States, a new startup can rely on a plethora of other companies that provide support services. In Asia – even in rich countries like South Korea – these companies simply do not exist. This means that a platform like TOSS, or its large, more established technological peers, Naver and Kakao, had to build these services itself.
“When we launched our flagship money transfer service, it was loved by so many users, so we were able to grow very quickly. We quickly realized that all the other vertical finance sectors were not covered by other players, “he explains. “There was a huge void on the Korea market, so we were able to seize these opportunities.”
Startup milestones
Viva Republica has taken a key step last year, when he reported his First annual benefit Since its foundation over a decade ago. The company announced a net profit of 21.3 billion Korean won ($ 15 million) for 2024, compared to 216.6 billion won ($ 152 million) the previous year. Income also jumped 43% to 1.96 Won Billion ($ 1.4 billion).
Lee says that the very first benefit is due to the emphasis on income growth rather than market share. “Unlike other fintech players, user growth is not really in correlation with income. Most of our income does not come from users, but rather from our commercial customers”, attracted by the point of sale of TOSS or its advertising opportunities.
“During the next three to five years, it will be above all a story about the acquisition of more commercial customers,” he says.
The benefit of Viva Republica has also come from a strong growth in launching securities, the platform actions trading service. Lee notes that this is the only service that invoices users of costs and contributes to around 20% of the total platform income.
He added that Tock Securities, after its launch in 2021, increased quickly due to the Toss Superapp.
“It took Robinhood two years to obtain two million securities accounts,” said Lee. “We did it in five days.”
The launch has higher penetration among young Koreans, with up to 90% of those in the twenty using the platform. Lee says that although there are not many differences between younger and older users of TOSS, a major divergence is that more recent generations are more open to invest in foreign actions, mainly in the United States
Now that Viva Republica has found a profitable commercial model, is the company on the path of a public early, the next big step for a startup?
Lee says that Viva Republica plans to make public “in the near future”, but refused to give specific details on the calendar and the location.
According to local media, Viva Republica envisages an introduction to the American stock marketAbandon the plans to register in South Korea at the end of last year. The company would have estimated that the Korean stock markets will not properly appreciate a Fintech platform as a Tock. (Lee refused to share the details when in a hurry.)
The actions of the FinTech Competitors Services Kakobank and Kakaopay have lost around 70% and 80% of their value since their respective IPOs 2021.
Market confidence
Korean actions often suffer from low evaluations – sometimes nicknamed “Discount in Korea». Analysts blame the threat posed by neighboring North Korea and bad corporate governance among the country chaebolsThe massive conglomerates that dominate the economy. The country considered Transmission market reforms This would unlock value, similar to what was successfully pursued by its neighbor Japan.
However, the reforms have stalled due to a more urgent political crisis.
In December, the president of the time, Yoon Suk Yeol, tried to impose martial law. After generalized demonstrations of the public and the opposition, Yoon withdrew his statement a few hours later.
The legislators quickly suspended and dismissed Yoon, stimulating months of political instability. Things are now starting to end after the country Constitutional Court confirmed the dismissal of Yoon, officially withdrawing it from its functions – the second time that a president is removed in less than a decade. Korea will organize SNAP presidential elections in early June.
However, Lee thinks that the crisis shows the forces of South Korea. “I gain more confidence in the market,” he says. “Everything was done by the Constitution, and the process was peaceful.”
“This is the tilting point where we really have to focus on economic growth, not only businessmen, but also politicians,” continues Lee.
South Korea is struggling with disillusionment among young people, frustrated by high levels of debt, unaffordable housing and more limited social mobility. This is partly why many have turned to retail in actions, or even more speculative assets such as cryptocurrencies.
The country of East Asia, a major exporter, also negotiates frantically with the United States to alleviate the prices imposed by President Donald Trump, including 25% of car rates and 26% of “reciprocal rates”.
When asked if uncertainty more broadly affects confidence among individual Koreans, Lee highlights the growth in Tock advertising affairs last year as proof that the country’s economy is still strong.
And it remains optimistic about South Korea as an attractive market for all those who want to enter the Fintech.
“Despite its limited population,” says Lee, “the Korean market is massive.”
The interview was carried out in collaboration with Fortune Korea.
This story was initially presented on Fortune.com
