[UP&DOWN] Fasto, a Prospective Unicorn Gaining Attention Amid Investment Cliff

[Asia Economy Reporter Park Soyeon] Among the most notable companies in the startup investment sector recently is FASSTO, an artificial intelligence (AI)-based logistics platform company. Founded in 2018, FASSTO operates as a direct business providing fulfillment services as a partner of Naver, as well as a hub business that manages logistics centers on consignment. Fulfillment services refer to providing comprehensive logistics outsourcing services such as product receipt, storage, order processing, packaging, and shipping to sellers for a fee. This method handles all tasks other than sales for online sellers who feel fatigued by inventory and logistics management. CEO Hong Jongwook is a seasoned figure in the distribution and logistics fields, pursuing logistics innovation using AI technology. After working at Emart, Shinsegae Group’s Strategy Office, and TMON, he founded FASSTO.

FASSTO reduces the time sellers (online vendors) spend managing invoices and handles all tasks arising throughout the entire logistics process, from product receipt to storage, order processing, packaging, and delivery. Sellers who sell products on various platforms can easily manage shipping, returns, and order management by linking their sales information to FASSTO’s platform. FASSTO’s strength lies in its automated logistics design technology that automatically processes shipments by integrating with the logistics system once an order is placed. This is achieved through its self-developed AI and big data-based logistics system and logistics center control system. The automated processing method allows shipments to be handled even late at night, making it advantageous for dawn delivery services. FASSTO is aiming to advance its services further. It is designing a logistics innovation system that incorporates not only the Internet of Things (IoT) and AI but also robots and drones.

FASSTO is a prospective unicorn attracting investors’ attention. Its sales revenue was 12.9 billion KRW as of 2021. This year, it successfully secured a large-scale Series C investment round. This investment round, totaling 95 billion KRW, saw major investors including private equity fund (PEF) operator VIG Partners participate in large numbers. Hana Ventures, SK D&D, Shinhan Venture Investment, KDB Industrial Bank, and Yuanta Investment also took part. Last year, FASSTO was selected as a Baby Unicorn company by the Ministry of SMEs and Startups, and this year it was chosen as a prospective unicorn. Companies selected as prospective unicorns are those with high potential to grow into unicorn companies valued at over 1 trillion KRW and can receive special guarantees from the Korea Technology Finance Corporation up to 20 billion KRW.

Naver Partner Providing Fulfillment Services
Comprehensive Logistics Outsourcing Including Receipt, Storage, and Shipping
Preparing Innovative Technologies Using Robots and Drones
Participation from VIG Partners, Hana Ventures, Industrial Bank, etc.

Despite the challenging market conditions with weakened investment sentiment recently, FASSTO’s success in securing investment is due to its unique technological competitiveness, reasonable service pricing, and strong partnership with Naver. Among domestic fulfillment companies, FASSTO is the only one that owns 100% self-developed hardware design and software. In 2020, it achieved a delivery accuracy of 99.99% (misdelivery rate of 0.01%). In the first half of this year, it surpassed 10,000 cumulative members. Its accessibility is also an advantage, as anyone can use its services at reasonable prices without restrictions such as minimum volume or contract periods. The scale of logistics processing is continuously expanding. FASSTO plans to secure 300,000 square meters (about 90,000 pyeong) of logistics centers by the end of this year. Following the opening of the Yongin 1 logistics center, sales approximately doubled, and with the opening of the Yongin 2 logistics center this year, even faster growth is expected. FASSTO plans to secure more than 10 additional logistics centers within the year to expand its cargo handling capacity.

The fulfillment industry is expected to grow rapidly in the future due to the growth of the online market, the scaling up of small and medium sellers, and the expansion of the D2C (Direct to Consumer) market business. The domestic e-commerce market size is approximately 210 trillion KRW, with the fulfillment market estimated at 2.3 trillion KRW. The logistics service methods of e-commerce companies can be broadly divided into two types. One is the logistics service method of companies like Coupang, Market Kurly, SSG.com, and eBay Korea, which expand their own logistics centers and internalize the entire logistics process. The other method is strengthening services through logistics ecosystem cooperation with fulfillment operators, as seen with Naver, 11st, and GS Home Shopping. In this market situation, FASSTO is expected to further solidify its partnership with Naver. A VIG Partners representative said, “Unlike competitors Coupang and SSG.com, Naver strengthens logistics services through cooperation with external partners,” and predicted, “The partnership and synergy between Naver and FASSTO will be long-term.”

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