Manga! WEBTOON Entertainment, Inc. (WBTN) priced its IPO at $21.00 – the high end of its range – and sold 15.0 million shares to raise $315 million on Wednesday night, June 26, 2024. The comics and creative content platform’s stock started trading Thursday, June 27, on the NASDAQ – opening at $21.30 at 12:06 p.m. EDT. WEBTOON shares hit a session high at $24.00 and eased up some to trade at $22.61 – up $1.61 from their IPO price of $21.00 – shortly after 1 p.m. EDT. Volume so far has exceeded 2.6 million shares. (Editor’s Note: This column, published Wednesday night, was updated at midday on Thursday, June 27, to include news on WEBTOON’s stock debut on the NASDAQ.)
WEBTOON, whose roots are in South Korea, is a Los Angeles-based comics and creative content platform whose most ardent users are predominantly Gen Z – ages 14 to 28 – and Millennials – ages 25 to 34, the prospectus says.
Goldman Sachs, Morgan Stanley and J.P. Morgan led the joint book-runners’ team, which included Evercore ISI, Deutsche Bank Securities, UBS Investment Bank and HSBC.
Pricing the IPO at the high end – at $21.00 – gave WEBTOON Entertainment a market cap of $$2.67 billion.
BlackRock Inc., the cornerstone investor, had indicated an interest (through certain funds) in buying up to an aggregate of $50 million of stock in the IPO, the prospectus says.
NAVER U.Hub Inc., a subsidiary of NAVER, WEBTOON’s largest shareholder, agreed to buy $50 million of stock in a private placement that would close concurrently with the IPO, the prospectus says. After the IPO and the private placement, NAVER will own a stake with about 63.4 percent of the voting power of WEBTOON’s outstanding stock.
LY Corporation, a joint venture of Japan’s SoftBank Corp. and NAVER, is also a principal shareholder. (LY stands for Line Yahoo.)
Kakao Corp., South Korea’s Internet conglomerate and the parent of KakaoTalk, South Korea’s popular messaging app, is viewed as WEBTOON’s biggest direct competitor.
Korea, Comics and Community
Junkoo Kim started WEBTOON in 2005 while he was working as a search engineer at NAVER, the largest Internet company in Korea, the prospectus says.
“Junkoo was a lifelong lover of comics and their rich and vibrant worlds and diverse characters. He wanted to create a platform that empowered creators to share stories and for fans, like himself, to discover this unique content. Instead of a traditional storytelling format, confined to a page or screen, he pioneered something different. Through serialized releases of bite-sized episodes available online, he created a format that was not only easily accessible and highly engaging for fans, but also easier for creators to create and share with a wide audience.”
In the prospectus, WEBTOON says: “We have pioneered a cultural movement by revolutionizing the storytelling format and democratizing content creation and publication. WEBTOON empowers creators by enabling them to participate economically in their own creation, and users, by offering an endless library of content. Our community connects 24 million creators with approximately 170 million monthly active users in over 150 countries around the world.”
WEBTOON’s audience in North America totaled more than 20 million monthly users as of December 2023 – and 75 percent of those users were Gen Z – people born between 1996 and 2010, according to the prospectus. Here’s the excerpt:
“Our roots are in Korea, where half the population visits our platform each month, but our community is truly global. In 2013, we launched in Japan, given familiarity with similar content types, and today we have over 20 million monthly users there; our format is quickly gaining popularity” with users in North America, “where we have more than 20 million monthly users and 75 percent of users are Gen Z as of December 2023; and our platform has become truly global with over half of all monthly users outside of these three markets.”
Regarding its revenue stream, WEBTOON says in the prospectus: “We generate revenue in multiple ways. In the year ended Dec. 31, 2023, 80.2 percent of our revenue was from Paid Content, 11.3 percent was from advertising and 8.4 percent was from IP Adaptations. Our diversified business model enables us to monetize user engagements across a broad range, including through users paying for premium content. Our platform also enables us to monetize through advertising revenue in a way that is additive to the user experience.”
For the 12 months that ended March 31, 2024, WEBTOON Entertainment reported a net loss of $120.23 million on revenue of about $1.3 billion, the prospectus says.
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