[nasdaq IPO] "Yanolja in America" Lee Soo-Jin to hit $10 trillion valuation

Travel platform Yanolja has set its sights on an initial public offering (IPO) on the Nasdaq in the U.S. after reorganizing under the sole leadership of founder Lee Soo-jin. Yanolja has been on an aggressive mergers and acquisitions (M&A) spree after receiving a large investment from SoftBank, led by its chairman Masayoshi Son. More recently, it has raised the ransom as sales in its core cloud business have risen. With a valuation of $10 trillion, will Yanolja's bid for the U.S. succeed?

In April, Yanolja switched to a sole CEO system under founder Lee Soo-jin. Previously, Bae Bo-chan and Kim Jong-yoon were co-chief executive officers, but they were demoted to chief strategy officer (CSO) and chief financial officer (CFO), respectively. Yanolja's Chief Technology Officer (CTO) will be Junyoung Lee, CEO of Yanolja Cloud.

While Yanolja described the reorganization as a way to make a global leap and strengthen the responsible management of each division, industry observers believe it is a move with the company's listing on the Nasdaq in the U.S. later this year in mind. The U.S. stock market is known to have more complicated and demanding paperwork than in Korea. As a result, listing is usually pursued under a sole representative system. Yanolja previously established a wholly owned subsidiary, Yanolja US LLC, in the state of Delaware in February.
In 2020, Yanolja prepared to list on the Korean stock market with Mirae Asset Securities and Samsung Securities as lead managers, but turned to the U.S. stock market the following year after receiving a $1.7 billion (approximately KRW 2.3 trillion) investment from SoftBank Vision Fund led by Chairman Masayoshi Son. SoftBank valued Yanolja at around $10 trillion at the time. Yanolja believed it could be valued higher overseas than domestically, and that it would be easier to raise funds. Yanolja is reportedly preparing to go public with listing organizers Goldman Sachs and Morgan Stanley.

Yanolja operates in three core businesses: Platform, Cloud, and Interpark Triple. As of last year, Yanolja's revenue by business was composed of 48.96% (KRW 375.3 billion) for platform, 22.60% (KRW 173.3 billion) for cloud, and 33.84% (KRW 259.5 billion) for InterparkTriple. In particular, cloud revenue, which is growing as Yanolja's core business, has exploded from KRW 33.6 billion in 2021 to KRW 107.9 billion in 2022 and KRW 173.3 billion last year. The proportion of Yanolja's cloud business revenue more than doubled from 10.18% in 2021 to 22.60% last year. Yanolja's revenue also doubled from KRW 330.2 billion in 2021 to KRW 766.7 billion last year.

Yanolja's cloud business began in 2019 with the acquisition of PMS (guestroom management system) company EZTechnosys. Last year, it also acquired distribution (lodging) solutions company Go Global Travel (GGT). Yanolja offers various solutions for lodging companies, including PMS, which manages rooms, facilities, and personnel; CM, which provides integrated customer data; and RM, which calculates supply and demand to effectively sell rooms. Yanolja exports its cloud solutions to more than 190 countries around the world. Yanolja's cloud competitiveness is one of the reasons why Chairman Masayoshi Son has invested more than 2 trillion won in Yanolja.

In addition to cloud, Yanolja has completed M&As such as Hotel Now in 2016, Garam Information System and Cereal in 2019, and Interpark-Triple in 2022. It currently operates 50 overseas offices in 27 countries and five R&D centers. In the meantime, foreign media such as Bloomberg have estimated Yanolja's enterprise value at up to $9 billion (about KRW 12.3 trillion).

Yanolja follows the example of Coupang, which successfully entered the US stock market in March 2021. The company set up a local subsidiary in the state of Delaware. Delaware is the second-smallest state in the U.S. with a population of 1 million, but it is home to 93% of the nation's publicly traded companies. Delaware is exempt from some corporate taxes, even if it's just your headquarters, and it's so business-friendly that you can form a company in a day. The board of directors is also flexible, so even a one-person board is not restricted. Coupang Inc (Coupang's parent company) is also incorporated in Delaware and listed on the New York Stock Exchange.

Yanolja recently hired Alexander Abraham, a 20+ year veteran of the NYSE, as its Chief Financial Officer (CFO). Yanolja plans to raise $400 million (approximately $548 million) in the IPO. Yanolja's shareholding structure is dominated by founder Lee Soo-jin, who owns 16.37%. His stake increases to 31.82% when including related parties. SoftBank, chaired by Masayoshi Son, holds a 24.93% stake in Yanolja. Yanolja's market capitalization is currently estimated to be around 6 trillion won. In this case, SoftBank's stake would be worth about $1.5 trillion. If Yanolja were to go public in the U.S., it would need a valuation of around $10 trillion to recoup its investment.

Son Wontae (tellme@fntimes.com)