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The founder and CEO of Singapore-based marketplace Qoo10 has pledged to use his personal assets to secure about $58 million (80 billion KRW) to compensate South Korean customers and vendors affected by his company’s liquidity crisis, which in turn resulted in failed payments to about 60,000 small merchants who sell through its Korean marketplace subsidiaries, TMON and WeMakePrice.
During an emergency hearing held by the South Korean government to discuss Qoo10’s liquidity crisis, Young-bae Ku, the company’s founder, said he would secure the amount over the next 30 days. He holds a 42.77% stake in Qoo10, while private equity firms, including KKR, own a 25.65% stake in the Singaporean e-commerce platform.
“I will sell my whole stake in Qoo10 or use it as collateral to deal with the situation,” Ku said.
The hearing comes a day after TMON, once valued at $1.4 billion, and WeMakePrice filed for court receivership after failing to pay merchants this month.
Qoo10 will secure emergency liquidity from overseas funds, sell its subsidiaries, or use them as collateral for cash, the company said in a statement on Monday. Qoo10 had told Korean financial authorities that it planned to raise $50 million in August, but according to the country’s Financial Services Commission, the company is yet to submit details.
The Seoul Bankruptcy Court said this week that TMON and WeMakePrice have been unable to recover on their own, and that it would review their applications and decide whether to initiate the rehabilitation process. The review process usually takes anywhere from a week to a month, per Korean media.
The government steps in
South Korea’s Ministry of Economy and Finance on Monday said it would provide $400 million (560 billion KRW) in financial support to vendors affected by payment delays on TMON and WeMakePrice. In addition, South Korean financial authorities announced plans to offer low-interest loans to the merchants impacted by the situation, along with options for extending repayments on current loans and taxes.
According to the ministry, these merchants’ unpaid bills have grown to around $151 million (210 billion KRW), up from $123 million last week, and there are concerns that the bills could balloon to $722 million (1 trillion KRW).
Over the last few years, Qoo10 has opted to grow through a series of acquisitions as it sought to strengthen its market presence and prepare its logistics unit Qexpress for an initial public offering on Nasdaq in the U.S. In addition to acquiring WeMakePrice in April 2023, and TMON in August 2022, Qoo10 picked up Korean online shopping platform InterPark Commerce (not the same as InterPark Triple) in March 2023 as well as Hong Kong-based Korchina Logistics via its logistics unit, Qxpress. Earlier this year, Qoo10 acquired Wish, the U.S.-based e-commerce platform, and AK Mall, an e-commerce company in South Korea.
However, these acquisitions also brought about financial burdens and operational challenges, leading to the current liquidity crisis.
Founded in 2010, Qoo10 is a Singapore-headquartered joint venture firm formed by the U.S. e-commerce company eBay and Gmarket founder Young Bae Ku, an e-commerce mogul from South Korea.
