Dunamu to New York!

Crypto Exchange Upbit's Parent Company, Dunamu, Plans to List on NYSE by 2025

Dunamu, the parent company of Upbit, the largest centralized exchange (CEX) in South Korea, has announced its plan to list its American Depositary Receipt (ADR) on the New York Stock Exchange (NYSE) by 2025, according to industry sources. If the listing is successful, Dunamu would join a group of Korean companies listed on the NYSE, including POSCO, KEPCO, SKT, KT, and LG Display.

Upbit represents over 80% of all cryptocurrency transactions in South Korea and is one of the top five crypto exchanges globally, alongside Binance, OKX, Coinbase, and Crypto.com. Given that there is no sign of Upbit’s influential in South Korea decreasing, therefore, it is crucial to understand Upbit and Dunamu's business structure in Korea.

What is Dunamu?

Dunamu means “Double-Tree” in Korean. It is currently a privately held company, with its core business in Upbit (Exchange Business). In addition to Upbit, Dunamu operates several subsidiary businesses, including Dunamu & Partners (Venture Capital), Securities+ (Korean version of “Robinhood”), and Lamda 256 (Layer-1 and NFT marketplace developer). Dunamu also has investments in real estate, including the "A+Asset Building" near Gangnam Station. However, Upbit is the only primary source of cash flow for the company, making it the focus of its operations.

Shareholder & Management

According to Dunamu's shareholder report, the largest shareholder is Song Chi-Hyung, the Chairman, and Co-Founder, holding a 25.7% stake. The second-largest shareholder is Co-Founder Kim Hyung-yeon, with a 13.2% stake. Other major shareholders include Kakao (10.9%), Woori Technology Investment (7.4%), and Hanwha Investment & Securities (6.0%). Mr. Lee Seok-woo is the CEO of Dunmau. He is the former CEO of Kakao and a seasoned government relations expert & lawyer. He is known for his proficiency in English and Korean and is well-positioned to navigate the necessary cooperation with the Financial Services Commission and the Financial Supervisory Service.

Valuation Forecast

Financial industry analysts predict that Dunamu, with its market dominance in South Korea, will exceed a $20 billion market cap if listed. This very optimistic estimation with the assumption that the Bull market will potentially return by 2025, as the current market capitalization of the leading cryptocurrency exchange, Coinbase, stands only at $15 billion. Today, the estimated market capitalization of Dunamu's private stock is around $4 billion.

Some Thoughts. . .

It is worth noting that the Korea Fair Trade Commission (KFTC) has closely monitored the prevalence of monopolies in the country, particularly among tech giants like Kakao and Naver. There are rumors that Kakao seeks to bulk sell Dunamu's shares to overcome government criticism of its expansion into the crypto market. Kakao recently faced criticism of monopolies in certain sectors such as SNS, Mobility, and Internet banking. Thus, it is potentially possible that Kakao wants to promote private stock sales through these strategic PR messages.

While Dunamu's market dominance in South Korea is undeniable, its $20 billion valuation may be premature, given that its non-Exchange businesses are still in a nascent stage. Dunamu can learn from Coinbase's active business expansion in payment, e-commerce, and wallet services, among other areas. Dunamu must prove its thought leadership as one of the largest crypto exchanges globally. Founders of crypto exchanges like CZ of Binance and Brian Armstrong of Coinbase have been active thought leaders in promoting a more mature crypto market. It is worth considering whether Song Chi-hyung and Lee Seok-woo can also stand parallel with CZ and Brian.