The domestic online video service (OTT) corporation Watcha is entering corporate rehabilitation proceedings.
According to industry sources on the 6th, the Seoul Bankruptcy Court's Rehabilitation Division 17 (Director General Lee Yeong-nam) decided to initiate rehabilitation proceedings for Watcha on the 4th. Previously, Watcha's creditor Inlight Ventures submitted a rehabilitation application to the court.
The deadline for submitting the rehabilitation plan is by January 7, 2026. The court will review the rehabilitation plan and then decide whether to authorize the rehabilitation. If deemed unlikely for rehabilitation, the bankruptcy process will begin. A list of rehabilitation creditors, secured creditors, and shareholders must be submitted by the 1st of next month.
As the court has not appointed a separate manager, Park Tae-hoon, CEO of Watcha, will continue to manage the company as the manager.
Watcha stated, "The existing refund and cancellation conditions and procedures specified in the terms will be maintained, and the service will operate normally without disruption," adding, "We will communicate transparently with users and partners and share updates on future developments."
Founded in 2011, Watcha began offering personalized movie recommendation services and launched streaming services in 2016. It attracted many users, leveraging strengths in movie ratings, but began facing challenges as competition in the OTT market intensified. According to AGAWorks Mobile Index, the estimated monthly active users (MAU) for Watcha, which was 1.29 million in January 2022, decreased to 460,000 last month.
Watcha recorded revenue of 33.8 billion won last year, down 22.83% from 43.8 billion won the previous year. The operating loss was 1.846 billion won, and the net loss was 8.296 billion won. Current liabilities exceeded current assets by 90.7 billion won.
In 2021, it secured a total of 49 billion won in convertible bond (CB) investments from major venture capital firms and individual investors, but it was unable to repay the principal and interest by the maturity date in November of last year. With no extension agreement signed, Shinhan Accounting Corporation, which conducted the audit, stated, "This raises significant doubts about the ability to continue as a going concern," and issued a 'disclaimer of opinion' in the audit report.