Credit: Mesh Korea.
South Korea’s start-up companies are the latest victims of fallout from the Legoland Bond Crisis. (See previous coverage, “The Politics of the Legoland Bond Crisis.”) On November 28, Mesh Korea, a market leader in providing delivery service for restaurants, filed for restructuring its debt. Mesh raised new investments of KRW 100b (USD 85m) at a valuation of around KRW 1t (USD 850m) as recently as last year. It is currently valued at around KRW 200b (USD 170m), and failed to raise capital earlier this year.
Other market leaders are also struggling. Sandbox Network is South Korea’s largest production company for celebrity Youtube creators, with 560 employees and annual revenue of KRW 113.6b (USD 87.2m). On November 27, Sandbox announced that it would sell its eCommerce division and discontinue its eSports business, while laying off staff. The valuation of Watcha, South Korea’s arthouse streaming answer to Netflix, cratered from KRW 500b (USD 420m) to KRW 78b (USD 60m) this year.