"US IPOs Raised 217 Trillion Won Last Year"... Korea Faces Challenges in Introducing Multiple Voting Rights

Active US IPOs... Over 100 Cases in Q1, Investment Funds of 43 Trillion Won
Korean Unicorn Companies Valued at 1 Trillion Won Considering US Listing
Multiple Voting Rights Law to Maintain Management Control Fails to Pass in April
"Must Transform into an Attractive Market to Attract Companies"

Coupang banner and Taegeukgi flag hanging in front of the New York Stock Exchange [Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] The bill to introduce a dual-class share system failed to pass in the April National Assembly session. Meanwhile, the number of domestic unicorns (companies valued at 1 trillion won) considering listing on U.S. stock exchanges, such as Dunamu and Yanolja, is increasing. They have judged that listing on the U.S. stock market is more attractive than the domestic market.

According to the Korea Startup Forum on the 1st, last year, about 400 companies debuted on the U.S. stock market through initial public offerings (IPOs), raising a total of 195 billion dollars (approximately 217 trillion won) in early-stage investment. Additionally, during the first quarter of this year, there were about 100 IPOs on the U.S. stock market, with investment funds reaching 39.2 billion dollars (approximately 43 trillion won).

A representative example is the metaverse company Roblox, which went public on March 10 and was valued at 41.9 billion dollars, followed by Coupang, which was listed the next day on March 11 with a valuation of 84.4 billion dollars.

U.S. IPOs are expected to remain active going forward. Companies attracting attention for future U.S. listings include grocery delivery startup Instacart and stock trading application Robinhood. Korean unicorns such as Market Kurly, Dunamu, Yanolja, and Naver Webtoon are also considering listing in the U.S.

The reason for the U.S. stock market listing craze among unicorn companies is that the U.S. market focuses more on future value than on current business performance. Additionally, as the world's largest market, it allows companies to attract more capital. The U.S. also has a dual-class share system, which does not exist in Korea, enabling founders to raise funds without risking control over management.

Asia Economy DB=Photo by Jinhyung Kang aymsdream@

Dual-class shares refer to shares that grant two or more voting rights per share. This system can solve the problem faced by venture entrepreneurs whose ownership stakes shrink with each large capital raise, making it difficult to maintain control. However, it has not yet been introduced in Korea.

In December last year, the government submitted a bill to the National Assembly allowing founders of unlisted venture companies to hold up to 10 voting rights per share. However, concerns were raised that this system could be abused as a means for large conglomerates to secure management succession, leading to the bill's failure to pass in April.

This contrasts with the atmosphere in the top four countries with the most unicorns? the U.S., China, the U.K., and India ? all of which operate dual-class share systems. For example, the European delivery app Deliveroo initially planned to list in the U.S., but after the U.K. government lowered regulatory barriers and allowed dual-class shares, it listed on the London Stock Exchange.

A Korea Startup Forum official said, "The dual-class share system is one of the main reasons many companies prefer to list in the U.S." and added, "Many countries around the world are actively adopting the dual-class share system."

He continued, "Global unicorns are trending toward listing on stock markets that highly value corporate worth regardless of borders," emphasizing, "Korea should also introduce the dual-class share system in line with global trends to transform into an attractive market for domestic and foreign companies."

This content was produced with the assistance of AI translation services.