Naver-Backed Webtoon Shares Rise 9.5% After $315 Million IPO

(Bloomberg) -- Webtoon Entertainment Inc. shares climbed 9.5% in the online comics company’s debut after a US initial public offering that raised $315 million, priced at the upper end of a marketed range.

The company, backed by South Korea-based Naver Corp., sold 15 million shares for $21 each on Wednesday. Webtoon shares closed at $23 apiece on Thursday in New York.

At that price, Webtoon has a market value of about $2.9 billion. Naver owns more than 60% of the shares and Tokyo-based LY Corp. has about a 25% stake, according to its filings with the US Securities and Exchange Commission.

Naver-Backed Webtoon Meets Goal To Raise $315 Million In IPO

Accounts managed by BlackRock Inc. had indicated an interest in purchasing up to $50 million in Webtoon shares as a cornerstone investor, the filings showed.

IPOs in the US are flowing at a steady pace, easing concerns after last year’s recovery sputtered. The market is heading for the best first six months since 2021, with $20.6 billion raised so far, data compiled by Bloomberg show.

In an interview, Webtoon executives said they intend to use the proceeds from the offering to expand their business globally. Founder and Chief Executive Officer Junkoo Kim and Chief Financial Officer David Lee said they will continue to experiment with different business models in Korea, while in Japan their attention is on generating more revenue from existing customers. France is a new market they plan to develop.

“I think that every country has a different role to play,” Kim said in an interview.

Naver-Backed Webtoon Meets Goal To Raise $315 Million In IPO

Digital Natives

Webtoons consist of serialized releases of bite-sized episodes, told primarily through web comics, which scroll vertically, and text-based web novels. Its users are digital natives, and 75% of them are under the age of 25, according to Lee.

“For them, a web comic is a new category of content with just enough imagery, just enough dynamic motion to give them a direction for a story that they can choose to snack on,” Lee said.

The company connects 24 million creators with about 170 million monthly active users in more than 150 countries, the filings show. It had a net loss of $145 million on revenue of $1.28 billion last year.

Naver, which provides online services from search and shopping to social media, had considered listing the Webtoon business since 2021, around the time the novel medium began to catch on in major markets such as the US. Today, webtoons are considered one of South Korea’s more successful cultural exports alongside K-pop and drama series, driving business for Naver and rival Kakao Corp.

Kim believes that Webtoon’s platform model is a key source of its strength versus other content giants.

“If Marvel is making an impact on the world with one IP that Disney is creating in a writers room with 200 people, we’re a company that’s trying to win with diversity with a ton of independent creators,” Kim said.

The offering was led by Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase & Co. and Evercore Inc. The company’s shares trade on the Nasdaq Global Select Market under the symbol WBTN.

(Updates with closing share price in first and second paragraphs.)

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