A pedestrian walks past the logo of Upbit, the nation's largest crypto exchange operated by Dunamu, in front of its headquarters in Seoul. Yonhap

Dunamu, Toss, K bank hit by rate hike-sparked market doldrums

By Lee Min-hyung

The valuations of Korea's unicorn startups are declining rapidly, as fewer investors are parking their money into stocks amid a prolonged bear market sentiment both here and abroad.

According to data from Securities Plus Unlisted, Dunamu's stock price hit an annual high of 475,000 won ($380) in January 2022, but has failed to display robust performance throughout the year. The unlisted stock was valued at 114,000 won as of Tuesday.

Dunamu is the operator of Korea's dominant crypto exchange, Upbit. The company rose to fame in 2020 when the global crypto industry started drawing huge amounts of capital fueled by a liquidity expansion sparked by the coronavirus pandemic. The company extended its winning streak in terms of earnings and share price growth until the end of 2021.

But the company was hit hard by the abrupt shift in the global monetary environment represented by the U.S. Federal Reserve's aggressive set of rate hikes. Dunamu's earnings also experienced sharp declines in 2022, and its stock price tumbled more than 70 percent in about a year.

Other major mega-sized startups have also suffered similar shocks during the same period.

Viva Republica, the operator of a money-transfer app, Toss, is unlikely to go public anytime soon, as the valuation of its unlisted stocks is also on a sharp decline. The stock price of Viva Republica reached 130,000 won in mid-January of 2022, but fell to 37,600 won as of Tuesday, hit by the rate hike-triggered financial turmoil throughout last year.

Shares of K bank, a Seoul-based internet-only bank, have tumbled due to similar reasons. The company's stock price hit an annual high of 23,400 won on Mar. 30 of last year, but has since plunged to 10,700 won, according to data from the unlisted stock trading platform. The company reiterated its strong willingness to go public by the end of this year, but investors remain doubtful about the plan, as the company will not be properly valued under the current market circumstances.

Kurly, the operator of an online grocery delivery service, Market Kurly, is also continuously delaying its plans for an initial public offering (IPO). Kurly's unlisted stock price reached 116,000 won as of Jan. 24, 2022, but experienced a sharp decline for the past year, falling to an annual low of 20,100 won on Jan. 5, 2023.

Market insiders remain skeptical over the firms' near-term rebounds, as uncertainties surrounding the Fed's monetary policy continue to dampen investor confidence.

"Few companies will push for an IPO under the current volatility in the global financial market," an industry source said. "Any clear signs of a policy shift by the Fed should be detected, so investors can regain their trust in the stock market."