Wallapop ensures a ‘pantry’ for a demanding year 2023 in the capital. The second-hand products buying and selling startup has definitively signed the ‘mega round’ of financing with which it raises just over 80 million euros. Contrary to what happened in previous operations, there was no sale of shares in the secondary market, so the amount disbursed does not reach three figures. The Korean giant Naver leads, which contributes most of the expansion, although other relevant shareholder funds also participate.
The talks took place during the second part of last year, as reported by La Información. According to known sources, the agreement between all parties was finally achieved before the end of the year, with all the issues closed in January. With the final figures, it becomes one of the most relevant rounds by size in the last calendar year of the Spanish ecosystem which, like the rest of the markets, has been influenced by a certain slowdown in investment, especially accentuated after the summer.
In total, according to the same sources, the total investment exceeds the barrier of 80 million euros. Everything corresponds to new capital, that is, to shares issued by the company. The vast majority of the capital is contributed by Korelya Capital, the venture capital fund promoted by the Korean internet giant Naver (of which it is its largest shareholder), which was already the main partner after the last round signed in 2021. In a first At that time, it was estimated that the amount to be invested exceeded 100 million, discounting that there would be an exchange of shares already issued in the hands of minority partners who were seeking to leave. However, this has not finally occurred.
The amount disbursed in the Barcelona-based startup is therefore very similar to that allocated for new shares in the 2021 round. At that time, Naver’s fund subscribed to all the shares with an investment of 75 million euros (the total investment was 157 million, so the difference was allocated to the secondary market for the partial or total exit of minority shareholders). On this occasion, it is just over 80 million but exclusively as new capital.
The valuation of the operation has been upward, but logically it has not reached that of a unicorn (1,000 million). As reflected in the startup’s annual accounts, those 75 million contributed entirely by Naver in 2021 together with the shares in secondaries purchased (up to the 115 million that it disbursed in total) allowed it to assume 18.3% of the titles. The ‘price’ that was made public was 690 million euros. But the secondary transactions that were signed left that figure somewhat above 400 million euros.
After this expansion, Naver gains more positions as the company’s main partner. The percentage has not been revealed but it is well over 20%. Despite everything, due to the participation of some of the key shareholder funds, they continue to have significant representation. It must be taken into account that there are three other international venture capital managers who share a significant part of the cake. At the end of 2021, the distribution was as follows: Insight Partners had 17.5%; Accel Partners controlled 16.3%, and 14W had 15.3%. Despite everything, there are still several dozen minority partners who have not yet left the company.
The classified business for second-hand items (circular economy) has become a key for Naver. With this investment, the Koreans have injected almost 200 million euros into the Spanish company in just two years. It is not the only relevant transaction that has been carried out in this sector. The acquisition of 100% of the shares of Poshmark, a platform similar to Wallapop but dedicated exclusively to clothing, culminated in the last quarter of last year. In total, he offered $1.2 billion to take over the company.
profitability
With this injection, the company has a cushion at a particularly delicate moment for the capital market in the startup sector. It seeks to have gasoline to grow outside of Spain, after landing in Portugal and Italy. Today the company is not profitable. In 2021, its sales shot up to 51 million euros -from advertising and commissions for product shipments- but consolidated losses also grew to almost 34 million compared to 31 a year earlier. The company’s business plan contemplates obtaining benefits “gradually in certain markets” throughout the years 2024, 2025 and 2026.
After leaving the United States with the merger of its division with its rival Letgo years ago, the startup directed today by Rob Cassedy and co-founded by Gerard Olivé, Miguel Vicente and Agustín Gómez remains independent. Of course, as they are based on their accounts, there is a “medium-term” probability of a liquidation event of their ‘stock options’ plan for the staff and the leadership. That event can be a sale to a third party or an IPO. In total there are provisions for almost 43 million euros for this chapter.
Wallapop’s is one of the most relevant operations of the last six months. Starting in the second quarter of last year, the investment market in this type of company by venture capital funds slowed down significantly. The €123 million ‘mega round’ of the human resources software company Factorial, which made it a unicorn in October, did surpass it. It is above others like Stratio or Cobee. In this first part of 2023, the slowdown is expected to continue and the most optimistic speak of some recovery in the second half.
