Dentist-Turned-Entrepreneur Takes Fintech Superapp Toss To The Next Level

Viva Republica head Lee Seung-gun is taking his finance superapp Toss to its subsequent stage with an enormous push in Southeast Asia and a blockbuster funding spherical within the works—and that’s only the start.

This story is a part of Forbes’ protection of Korea’s Richest 2022. See the complete checklist right here.

It’s been seven years since Lee Seung-gun turbocharged South Korea’s cellular funds business together with his money-transfer app Toss, which he then beefed up right into a monetary companies superapp. Now the previous dentist is searching for a bit of Asia’s fast-growing fintech market, setting the stage for bold plans to go international. “We have banking, securities and all that in a single app, which is giving [investors] extra confidence that Toss would possibly develop into the primary participant in your entire fintech business,” says Lee, founder and CEO of Viva Republica, the app’s operator, in a video interview from his workplace in Seoul’s upscale Gangnam neighborhood.

To pull it off, Lee is making ready a brand new funding spherical at a valuation of over $10 billion within the second quarter. “Already, a variety of buyers try to succeed in out to us,” he says. This potential elevate is on high of $940 million in complete funds obtained since 2014 from buyers together with PayPal, Sequoia Capital China and Singapore sovereign wealth fund GIC. The bulk got here final June when Viva Republica raised $410 million at a valuation of $7.4 billion, making it the highest-valued startup in South Korea, in line with researcher CB Insights, and Lee, who turned 40 in January, a billionaire. He debuts on this 12 months’s Korea Rich List at No. 36 with a internet value of $1.2 billion.

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Toss was an on the spot hit when Lee launched the app in 2015, which made it simpler for South Koreans to switch cash on-line. Now with 20 million downloads, its 11 million customers commonly faucet its dashboard of choices from insurance coverage to loans to investing on-line. To check the waters past Korea, Lee launched Toss in Vietnam two years in the past, the place its money rewards and debit card companies have drawn three million month-to-month lively customers, then expanded the push to Indonesia, Malaysia, the Philippines, Thailand and Singapore.

No doubt the market is large—Southeast Asia’s on-line lending section alone had $39 billion in transactions final 12 months, in line with a November report from Google, Temasek and Bain. But capturing the area’s burgeoning fintech market is simpler stated than performed. Southeast Asian tech giants like Singapore billionaire Forrest Li’s Sea, Anthony Tan’s Grab and Indonesia’s GoTo are already engaged in a fierce battle to be the native go-to superapp, together with fintech companies, and Viva Republica must struggle laborious for market share. Unicorn startups comparable to Tiger Global-backed Xendit in Indonesia and Singapore’s Nium, backed by the likes of Singaporean state funding agency Temasek and GIC, have additionally tossed their hat into the ring.

Jae-Hyun Kim for Forbes Asia

To that finish, partnerships will probably be key. Viva Republica’s technique head Seo Hyun-woo stated in a media interview earlier this 12 months that the corporate will shift from an natural development technique to actively pursuing abroad investments and acquisitions. In Vietnam the corporate tied up with Malaysia’s CIMB Group, one of many largest lenders in Southeast Asia by belongings. At the top of final 12 months it made its first abroad funding, shopping for a small stake in Republic, a U.S. startup-investment platform. “We’re not an organization the place we simply give precisely the identical product to the identical nation,” Lee stated in November. “We get into the market and attempt to study the issues of the shoppers and the way we will clear up [them].”

For Viva Republica to have a shot at changing into a high international fintech firm, it must first develop into worthwhile, says Lee Sung-bok, a monetary companies business researcher at Korea Capital Market Institute. Its gross sales greater than doubled to 820 billion gained ($672 million) final 12 months, whereas internet losses widened to an undisclosed quantity from 91 billion gained in 2020 as a result of aggressive hires and advertising prices, the corporate says. Being worthwhile would additionally make it simpler to go public, one thing which Viva Republica is taking a look at within the subsequent three to 5 years.
“Toss has been centered on advertising to extend the variety of its shoppers. But I feel the advertising methods taken by Toss have primarily elevated cherry-pickers,” he says. “In the period of digital improvements, I consider exterior cash may be simple to draw however is just not low-cost to maintain when the enterprise mannequin of Toss turns into often called not sustainable.”

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Lee has by no means shied from a problem. “I used to be a dentist,” says Lee, who graduated from South Korea’s high dental faculty at Seoul National University. “I knew nothing about IT.” After he completed obligatory army service in South Korea, the then 27-year-old met a schoolmate from dental faculty for recommendation on beginning his personal observe. But as an alternative of strolling away with a to-do checklist, Lee noticed a brand new path. It wasn’t what his buddy stated, it was what he had: the brand new iPhone 3GS. “It was a mind-blowing expertise,” Lee says. The successor to Apple’s 2008 iPhone 3G, whose revolutionary App Store modified how individuals used smartphones, was twice as quick and had video recording. But what transfixed Lee was its 65,000 third-party apps. “The very first thing on my thoughts was, ‘I need to construct an app’,” he recollects.

He set his digital ambitions into movement and employed a software program engineer. Lee labored two days per week as a dentist at a Samsung-affiliated hospital to fund the enterprise, and centered the remainder of his time on creating an app—any app. “Even if it was [terrible] or didn’t make any sense,” Lee says. There was a selfie app and an app that helped file on-line petitions—eight in complete, however all didn’t earn cash.
Then Lee, pissed off by how tough it was to make a web based cost in Korea, struck gold in 2015. Before Toss, Koreans needed to undergo a 10-step course of to switch funds that concerned coming into a number of PIN codes and passwords. Lee’s three-step app resonated with smartphone customers, and Toss signed up 600,000 clients in its first 12 months. Korea’s monetary giants raced to meet up with their very own choices and cellular funds within the nation quadrupled to $4.6 billion over the following two years. But his greatest problem, Lee says, was getting his mother and father’ blessing to stop dentistry and develop into an entrepreneur. “It was the primary time ever I really went towards them,” he says.

“We’re not an organization the place we simply give precisely the identical product to the identical nation. We get into the market and attempt to study the issues of the shoppers and the way we will clear up [them],” says Lee Seung-gun.
Jae-Hyun Kim for Forbes Asia

Han Kim, the Korean-American cofounder and managing director of California-based Altos Ventures, recollects how cellular finance in South Korea was inefficient. “I went via display web page after display web page [just to transfer money]. I assumed this was nuts,” says Kim, whose agency has invested in a few of South Korea’s most profitable startups, together with Bom Kim’s e-commerce large Coupang and Chang Byung-gyu’s on-line sport maker Krafton (Kim is No. 14 on this 12 months’s Korea Rich List with a internet value of $3.2 billion, whereas Chang is No. 25 with a fortune of $1.8 billion).

Lee’s tenacity in tackling South Korea’s archaic on-line money-transfer system is what helped Toss succeed, Kim says. He helped open the conservative monetary companies business by convincing regulators of the advantages of change, comparable to comfort and effectivity. “At its basis, fintech is a win-win enterprise that creates excessive value-add to customers via its improvements,” Lee stated at an business assembly in 2015 with regulators, authorities officers and the then-president of South Korea, Park Geun-hye.
Kim, who was the primary investor to again Viva Republica, says what units Lee aside is his openness to studying. “When he’s incorrect, he admits he’s incorrect, which is a uncommon trait in lots of people,” says Kim. Toss commonly launches new options to enhance its present companies. At one level, it launched three new options each week for six months, maintaining those that labored and killing those that didn’t. “We need everybody to attain one thing and be pleasant to failure,” Lee says of the company tradition at Viva Republica. “When you fail, you simply step up time and again till you lastly succeed.”

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