A strong alternative has emerged for the KONEX market, which has served as a stepping stone for venture companies to go public. The Naver Pay (Npay) startup venture capital investment platform, jointly developed by the Financial Supervisory Service (FSS) and Naver Pay, officially launched on July 7, signaling a potential paradigm shift in the funding landscape for the over-the-counter venture investment market.
According to financial investment industry sources on July 8, the FSS and Naver Pay held a launch ceremony for the Npay startup at Naver1784, attended by officials from the finance and venture sectors, and began pilot operations. This platform is a public-private collaboration project supported by the FSS to build an infrastructure for sharing venture investment information, with Naver Pay responsible for its development and operation.
Market participants view this platform as a formidable competitor that could effectively complement or replace the functions of the KONEX market.
Traditionally, the capital market structure required early-stage venture companies to first list on KONEX to secure funding and enhance visibility before moving on to KOSDAQ. However, with the Npay startup, companies can now attract continuous investment from institutional investors such as securities firms and venture capitalists in the over-the-counter market, reducing the necessity to undergo the KONEX listing process.
As the over-the-counter market becomes more active, the demand for listings in the regular market is likely to be diluted, presenting a potential competitive challenge for KONEX.
Conversely, some analysts suggest that this development could actually benefit the KOSDAQ market. In the past, the venture investment market has struggled with the lack of active secondary funds, leading companies to pursue KOSDAQ listings prematurely, often before they had fully developed. This has been criticized for causing a decline in the overall quality of the KOSDAQ market and distorting valuations.
An investment banking industry source stated, "The platform provides an opportunity for startups to mature further by receiving continuous investment in the over-the-counter market. If startups can strengthen their foundations and transition to KOSDAQ in a more refined state, the health of the KOSDAQ market will actually be enhanced." This reflects the divergent interests and calculations between KONEX and KOSDAQ regarding the platform's launch.
However, the platform will operate strictly as an institution-focused league. According to the FSS, only institutional investors with their own investment review capabilities, such as securities firms and venture capitalists, will have access to the platform, excluding individual investors.
In response to the rapid rise of the over-the-counter platform, the Korea Exchange emphasized its distinctiveness as a regular market. A representative from the Korea Exchange stated, "KONEX provides comprehensive incubating programs, including internal control improvements, prior listing, and accounting consulting, for companies ultimately aiming for KOSDAQ listing. If a company’s final goal is to enter KOSDAQ, it will choose the KONEX platform based on its desired approach."
* This article has been translated by AI.
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