Japan's Hikari Tsushin Invests in Korea's Auction
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Auction, Korea's leading online auction site, has attracted 7.37 billion won (US$6.5 million) in investment from Japan's leading communications company Hikari Tsushin and its subsidiary Hikari Tsushin Capital.
The Korean company announced on January 18 that it signed an agreement with Hikari Tsushin to sell its 4,500 shares to Hikari Tsushin and 25,000 shares to Hikari Tsushin Capital, respectively.
Through the deal, Hikari has acquired a 2.9% stake in Auction at 250,000 won (US$208) per share.
Hikari Tsushin also agreed with Auction to support the Korean firm's entry into the Asian market, including Japan, and help it to collaborate with other companies in the region for technical cooperation.
"We are planning to advance into Japanese online auction market, which is still less activated than Korea, at sometime during the second half of this year." he said.
According to Hikari Tsushin Capital, it selected Auction as its Korean investment target because of its smooth shift from a free service site to a pay site.
Ryoji Kabaya, president & CEO of Hikari Tsushin Capital, said: "Auction has a good profit model unlike many other Internet-based businesses. The number of auction site visitors has even increased in spite of its change into pay site last December, and that's why we have made a decision to invest in Auction."
Auction, which has nearly a half million subscribers and daily offers 110,000 different items for auction, expects that about 2 billion won (US$1.7 million) worth of transactions will be made through its auction site and will post sales of 5 billion won (US$4.2 million) this year.
Hikari Tsushin Capital, an IT special investment company established in 1999 as an affiliate of Hikari Tsushin, invested 2 billion won in Korea's Haansoft Inc. and 5 billion won in Haansoft unit Netian, a free e-mail community site, in November.
The Japanese company will also become the first Japanese venture capital firm to set up an office in Korea with an investment of 33.1 billion yen in Korean IT firms.