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Webtoon Entertainment, an online comics platform that has become South Korea’s latest successful cultural export, has priced its US initial public offering at the top of its marketed range to value the company at $2.7bn.
The Los Angeles-based group controlled by South Korean web portal giant Naver said on Wednesday it would sell 15mn shares at $21 apiece after marketing them for $18-$21. The IPO will raise $315mn, and shares will start trading on the Nasdaq in the US on Thursday.
South Korean companies including Naver and Kakao have led the manga industry’s digital transformation, making online comics popular internationally following the global success of K-pop and Korean films and dramas.
Webtoon Entertainment has about 170mn monthly active users in more than 150 countries, including 7.7mn US users. Its main markets are South Korea and Japan, which account for 27 per cent of global readership.
The IPO is expected to draw interest from investors, with online comics now a source of inspiration for the entertainment industry. Many popular TV dramas including Lovely Runner, Moving and Hellbound are based on so-called webtoons.
BlackRock, the world’s largest fund manager, has indicated an interest in buying up to $50mn worth of shares in the offering, according to the company’s filings with the US Securities and Exchange Commission.
Im Hee-seok, an analyst at Mirae Asset, said in a recent report that the US listing would be successful given the industry’s “explosive growth” in recent years. But the company also faces concerns about the industry’s slowing revenue growth rates after a pandemic-driven boom.
Industry executives hope the success of webtoon-inspired TV series will bring new international readers to their platforms as global fans seek out the sources of their favourite stories and characters.
Webtoon Entertainment, founded in 2005, posted a net loss of $145mn on revenue of $1.28bn last year. Naver will own 63.4 per cent of the company’s shares after the offering, while Tokyo-based LY Corporation will have nearly 25 per cent.
Analysts said it would be difficult for the IPO to boost shares of its parent in South Korea. Naver and LY have been embroiled in a data sovereignty spat between South Korea and Japan after Naver’s systems hosting the Line Yahoo internet service suffered security breaches.
Webtoons — comic strips designed to be read on smartphones and tablets — remain relatively unknown outside east Asia.
Still, South Korean companies are accelerating their expansion beyond the region, building audiences in Europe, Latin America and south-east Asia.
Webtoon Entertainment offers services in 10 languages including English, Korean, Japanese, French, Spanish and German. In 2021, Naver acquired Canadian company Wattpad, a web novel platform with 89mn users, for $600mn.
Goldman Sachs, Morgan Stanley, JPMorgan Chase and Evercore managed the offering.
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