Start-ups

The 'most difficult' decision that helped create a $9 billion start-up

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This $9 billion South Korean start-up is giving Amazon competition

SEOUL — When entrepreneur Bom Kim was advised to take his company public, he might have been delighted.

An initial public offering (IPO) could have made him and his stakeholders very wealthy and provide shining recognition for his years of hard work.

But instead, he was conflicted.

The prospect forced Kim to make what he calls the "most difficult" decision of his career. After embarking on an arduous six-month long listing process, Kim ultimately reneged on the deal. But, even today, it remains the moment he is proudest of, he told CNBC Make It.

Bom Kim, founder and CEO of Coupang.
CNBC

Kim is founder and CEO of Coupang, the $9 billion e-commerce giant that's been dubbed the Amazon of South Korea.

He started the company in Seoul in 2010, first as a Groupon-style daily deals business before quickly shifting to an eBay-inspired third-party online marketplace.

It was a success: Within three years, the platform crossed a $1 billion in sales and had turned profitable for the first time, according to Kim.

That rapid growth led investors to tell him to take the company public. But, says Kim, he couldn't shake the "nagging feeling" that something wasn't right.

"We had to be honest with ourselves and say once you go public, it's much harder, at least in the near-term, to pivot or to really change your direction," Kim told Make It in South Korea.

"We had to ask ourselves: 'Was the platform we had built, were the services and experiences that we were providing for our customers, creating a 5% difference or were we creating that kind of world where the customers we love, their jaws would drop?," he continued.

"And the reality was no," he said.

One of Coupang's fulfillment centers in South Korea.
Coupang

So, "right at the eleventh hour — literally the weekend before we were meant to go to the printers", Kim said he pulled out of the process, and instead set out on a year-long journey to transform Coupang into an end-to-end e-commerce platform designed to manage the entire customer experience, from desktop to door.

"If we wanted to provide something that really mattered to customers — 100 times better, exponentially better — we had to go through an enormous amount of change," said Kim.

"We had to change our entire technology stack, the way we did business, our business model."

"I think that was the most difficult, but the choice that I'm most proud of," said Kim.

I don't know if I can tell you that six months from now, or six years from now, that we will look similar to what we look today.
Bom Kim
founder and CEO, Coupang

Seven years on, that decision appears to have paid off. In 2018, a $2 billion investment from SoftBank gave the company a valuation of $9 billion, making it country's most valuable start-up.

"The company today is well over $10 billion in sales, growing 60% year-over-year," said Kim. "That didn't happen because of something we did, you know, this year. It really is something that we've invested in."

Despite those improved credentials, Kim said he still has no intentions of taking the company public in the near-term.

"Our sense of identity is firmly rooted in this belief that not only will we go to the ends and the depths to understand what our customer truly cares about — but we're willing to change everything about ourselves to make that happen," said Kim.

"I don't know if I can tell you that six months from now, or six years from now, that we will look similar to what we look today," he continued.

"But I can tell you that we will always be a company — a technology company — that is trying to leverage what we can from human ingenuity and technology to obsess about some aspect of customers' lives that we want to improve exponentially. That will be a constant," he said.

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