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.
“Hikari’s investment in Auction is not a mere capital injection but a
marketing cooperation, and this alliance will help upgrade our corporate
value,” said Oh Hyuk, president of Auction.
“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.
