Farfetch bailed out by Coupang

 In Companies, News, Unions

Farfetch, one of Portugal’s first unicorns, has effectively fallen under the control of the South Korean company Coupang, owned by founder and CEO Bom King.

On Monday Farfetch reached an agreement with Coupang, the largest e-commerce retailer in South Korea with a turnover of over €20Bn in return for founder José Neves to receive an emergency cash injection of US$500 million in the form of a loan to be repaid at 12.5% interest and without which the company would have declared bankruptcy after other investors refused to invest more money.
The company will now quit the New York Stock Exchange after 5 years, and he entire board of directors, with the exception of founder José Neves as the company will now pass under the total control of Coupang over the next few months.
The deal was struck through a partnership with Athena Topco, a company linked to Coupang, and Greenoaks Capital, one of Coupang’s closest and main partners. The financial company Baille Gifford, the main shareholder of Farfetch, which will also become a key shareholder in Coupang.
Bom Kim became a millionaire at 40 when the Softbank Vision Fund invested $US2Bn in Coupang after the company had been valued at US$9Bn.
Having no link to the luxury market, Coupang, which was founded in 2010, is today one of the largest electronic commerce retailers in the world with operations in South Korea, Taiwan, and Japan.
Coupang’s stock market valuation stands currently at US$29Bn, around 128 times that of Farfetch.