Morgan Stanley has invested $75.7 million in Korea Credit Data
Despite the ongoing challenges in securing funding for startups, Korea Credit Data (KCD), a fintech startup in South Korea that specializes in serving small and medium-sized enterprises (SMEs), has been successful in raising 100 billion won ($75.7 million) from Morgan Stanley Tactical Value Investing. This investment has valued the startup at 1.3 trillion won.
The company’s current valuation marks a significant increase of 25 times from its valuation five years ago. Additionally, it exceeds the estimated valuation during the last funding round in October 2022 by 200 billion won.
A privately owned startup in Korea that specializes in assisting small and medium-sized enterprises has become the country’s first fintech unicorn, with a valuation exceeding $1 billion.
On Thursday, KCD revealed that it received a new investment in a Series D2 round from the investment branch of Morgan Stanley Investment Management. This marks the first funding from a US investor in a Korean company, thanks to KCD’s comprehensive financial infrastructure designed to support small businesses throughout Korea.
In South Korea, a fintech startup was established in 2016 to provide financial services to small and medium-sized enterprises (SMEs). With approximately 4.1 million SMEs operating in the country, with a market worth 65.9 trillion won, this startup is poised to offer various financial solutions for these businesses.
Cash Note is a bookkeeping application offered by KCD, designed for small business owners to manage their cash flow. This includes monitoring revenue, credit card sales, and expenses, making it an essential tool for business management.
Over 1.3 million merchants utilize Cash Note, which accounts for over half of the platform’s registered user base of 2 million, as per KCD.
In addition, the application offers supplementary features such as financial records and policy details.
Additionally, KCD provides business owners with various other services, including point of sale (POS) systems and networking opportunities that enable them to share vital information.
KCD services have established an impressive infrastructure for SMEs that Morgan Stanley Tactical Value highly values.
According to Kim Hyun-sung, the vice president of Morgan Stanley Tactical Value who oversaw the KCD investment, KCD plays a crucial role in the SME world and Korea’s macroeconomy.
KCD has recently secured its latest investment, bringing its total raised funds since inception to approximately 260 billion won. The company’s previous investors include well-known names such as KB Kookmin Bank, KB Securities, GS Holdings, KT Investment, Pavilion Capital, Shinhan Card, Samsung Fire & Marine Insurance, Kakao Ventures, and Kclavis.
This new funding will help expedite the digital transition in Korea’s SME ecosystem, which relies heavily on analog ledgers and systems. KCD is particularly interested in the growth potential of Cash Note services, especially those related to cash flow analysis, communications, and the owner community.
In the future, KCD intends to establish a bank specializing in serving SMEs and using the massive amounts of data they have secured through Cash Note. However, industry observers have noted that gaining regulatory approval for such a plan in Korea may take work.