Korean grocery startup Kurly secures $164m from Sequoia, Hillhouse, DST

Online grocery delivery startup Kurly has raised US$164 million in new funding in a series E round led by new shareholder DST Global.

It was rounded off by existing investors Sequoia Capital China, Hillhouse Capital, SK Networks, Translink Capital, Aspex Management, and Fuse Venture Partners, according to a statement.

Kurly CEO Sophie Kim / Photo credit: Market Kurly

Also known as Market Kurly, the company was launched in 2015 by former Goldman Sachs and Temasek analyst Sophie Kim. It lets users order groceries such as eggs, bread, and vegetables through its website and receive them the following morning.

It plans to use the new funds to establish a new fulfillment center in
the Seoul Metropolitan area, which will be more than twice as large as its current centers.

Kurly also aims to speed up customer acquisition and make new hires. As of April this year, the company claims to have roughly 5 million registered users on its platform.

Korean Investors previously reported, citing sources familiar with the matter, that Kurly raised US$150 million in the round, valuing the firm at roughly US$780 million.

The funding round follows a recent surge in online shopping brought by the Covid-19 outbreak. However, the foreign investors noted that Kurly had to reach or surpass its proposed sales target, the sources said.

The new capital also comes months after it was reported that Kurly was in consideration to be acquired by its rivals Shinsegae and CJ Corp.

“As competition in the fresh food delivery market is becoming fierce, Kurly has fallen short of expectations compared to its early stage. But its strong brand is the most appealing factor for investors,” said one of the sources.

In 2019, Kurly saw its losses more than double to roughly US$80.3 million, even as its sales nearly tripled to about US$354 million. SSG.com, Shinsegae’s online mall, also posted losses last year, with SoftBank-backed Coupang, another contender in the market, expected to report a rise in shortfalls.

Update (May 8, 8:00 pm): This article was updated to include details from Kurly’s announcement of the funding round.