Local life community Karrot Market is aggressively increasing expenditure on the back of strong results. It had taken a conservative approach to new services and marketing in the past, but as its launched services gained traction, it increased investment in new services and marketing. Overseas subsidiaries are seen as the next growth engine, but assessments say it will take time to establish a revenue structure.
According to the startup industry on the 19th, Karrot Market is expected to post a record performance, surpassing 200 billion won in revenue last year. Revenue, which was only 11.8 billion won in 2020, exceeded 100 billion won to reach 127.6 billion won in 2023, and grew to 189.2 billion won in 2024. Last year, it broke through the 200 billion won mark for the first time, putting growth on track in Korea.
The top contributor is clearly the advertising business. In the third quarter last year, Karrot's advertising revenue was 194.9 billion won, accounting for 99% of total revenue. Not only local small businesses but also corporations are advertising services or products on Karrot Market. Based on user data from more than 20 million monthly active users, it finely analyzed user behavior and regional characteristics, diversified ad exposure methods and product offerings, and advanced the service.
The job listing service "Karrot Alba" also contributed to revenue. Karrot Alba is said to have accounted for 15% of last year's revenue. Karrot Alba formalized and converted the existing "jobs" board of Karrot Market into a service under the name "Karrot Alba" around Oct. 2021. To improve user convenience, it added region-based job features specialized for local hiring, such as the "10 minutes on foot" function, and developed the service.
Employers can post job openings without separate usage fees or commissions. If they run paid ads, the postings can be shown more often. The cumulative number of applications through Karrot Alba surpassed 50 million last year.
As core services delivered results in the market, the stance on marketing expense and operating new services also changed. Last year, it reportedly selected actor Park Bo-gum as a model and budgeted 700 million won for the modeling fee. It also invested 300 million won in the "Karrot neighborhood walking" service, which pays up to 200 won in Karrot Money when users take a walk in their neighborhood. Karrot Money can be used like cash at Karrot Pay merchants such as GS25 and Mega Coffee.
A Karrot Market official said, "The management was more interested in building a local community than generating revenue, so even when various revenue businesses were conceived, many did not receive final approval," adding, "They were also passive about marketing expenditure." The official added, "Recently, performance has improved thanks to the advertising business based on the local community, so the company has begun to allocate resources to marketing and new services."
The next test is the overseas subsidiaries. The growth of overseas subsidiaries is cited as a variable that will determine the direction of Karrot Market's corporate value. As the domestic business entered stable territory, it also increased its investment in the Canadian unit. Last year, it invested as much as 36 billion won in the local Canadian subsidiary Karrot Canada Corp. Karrot Canada operates the online secondhand marketplace "Karrot" in Canada. It invested 2.8 billion won in 2021, 6.9 billion won in 2023, and 25.9 billion won in 2024.
It also has subsidiaries in the United Kingdom and Japan, but they have not made progress. Another Karrot Market official said, "We were initially very interested in Japan, but the business didn't go well, and the United Kingdom is the same," adding, "The view seems to be that if we can succeed even on a small scale in Canada, it will become easier to aim for entry into the United States, so we are putting in the effort."