Posted on Wednesday, Jul 26th 2017
South-Korea based mobile e-commerce marketplace Ticket Monster has the distinction of being acquired by two Billion Dollar Unicorns LivingSocial and then Groupon, both of which spun it out. Today, Ticket Monster continues its journey as an independent Billion Dollar Unicorn in this highly competitive market.
Ticket Monster’s Journey
Ticket Monster (TMON) was founded in 2010 by Hyun-sung Dan Shin, Seong-yoon Chris Shin, Dong-hyeon Tom Kim, Kwon Gi-hyeon, and Lee Ji-ho with the idea of offering a coupon on one item in a day on its mobile-first e-commerce site. Each day, the site would feature an item called a Tmon, which includes services from restaurants, cafes, spas, and hair salons. Customers signing up for the Tmon of the day agree to buy it at a 50% discount, but only if a predetermined number of people also sign up for the deal. If the quota is met, everyone gets the discount, otherwise, no one does.
Within a year, it grew to 60 deals a day, 3 million members, 770 employees and revenue of $24 million. It was then acquired by US social commerce site LivingSocial in 2011 for an estimated $335 million. It went on to become LivingSocial’s most successful venture. However, TMON pivoted to more of a marketplace while LivingSocial had started imploding. Ticket Monster was then sold to Groupon in November 2013 for $260 million in stock and cash.
However, in order to focus on its US and European business, Groupon sold its 46% stake in Ticket Monster to KKR for $360 million in 2015 in a deal that valued it at $782 million.
Ticket Monster’s Financials
Ticket Monster has recently forayed into grocery sales with the launch of Tmon Fresh. Currently, online general merchandise accounts for 70% of TMON’s business and margins have been thinning in this segment due to increasing competition. Travel purchases account for 20% of the business. The remaining 10% is in groceries, which is one of the fastest growing segments. The company claims the grocery segment launch has resulted in a three-time jump in the frequency of visits to its site.
So far, the company has raised $165 million from investors including Anchor Equity Partners, Insight Venture Partners, NHN Entertainment Corp, Simone Investment Managers, and Stonebridge Capital. In April, the company raised $115 million at a valuation of $1.4 billion. The last round of funding was held in April 2016 at a valuation of $1.5 billion. The difference in valuation is attributed mainly to currency fluctuations.
The company plans to use the funds for its foray into grocery sales. TMON is still a couple of years away from profitability. The company recorded $252 million in sales in 2016, but had losses of about $137 million.
TMON competes with Coupang and Wemakeprice. Other online companies moving into groceries include Gmarket, Auction, Wemakeprice, and SK Planet. Wemakeprice, which has only raised around $85 million, has reported revenues of about $326 million in 2016 with operating losses of $56 million. Coupang recorded $1.7 billion in revenues with operating losses of $498 million.
Even at a flat valuation, TMON’s valuation is inflated as is often seen in this highly competitive sector where discounts drive up losses.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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