Naver is resetting its investment plan for 'DAEYU Europe startups.' Naver announced the acquisition of 'Wallapop', a C2C (consumer-to-consumer) company known as the Spanish version of a carrot market, indicating a shift towards focusing on mid-sized startups instead of local fledgling ones. Attention is drawn to whether Naver will engage in proactive investment activities in the EU (European Union), where regulations on artificial intelligence (AI) businesses are relatively strict, similar to its actions in North America.
According to Naver on the 6th, the company plans to acquire an additional 70.5% stake in Wallapop for €377 million (approximately 604.5 billion won). With the existing 29.5% stake included, Naver will secure a nearly 100% stake and incorporate Wallapop as a subsidiary. Wallapop, which has over 19 million monthly active users (MAU), is a leading C2C platform supporting transactions of a variety of items, ranging from daily necessities to electronics and automobiles.
Naver's investment history in Europe dates back to 2016. Naver viewed Europe as an important market supported by high internet usage rates and diverse startup nurturing policies. The company has conducted indirect investments in collaboration with 'Corelia Capital', an investment firm founded by Fleur Pellerin, a former Minister of Digital Economy in France. In addition, Naver supported promising local companies by establishing a presence at 'Station F,' the world's largest startup campus located in France, in 2017. In 2018, it also invested 258.9 billion won in its French subsidiary.
However, after about 10 years of significant development in the AI industry, Naver has had to revise its local investment strategy. The company withdrew from Station F, which had focused on new startups, at the end of last year. This change is interpreted as a response to the challenging environment faced by new IT startups due to the EU's stringent regulations on AI companies. The EU AI Act, which took effect on Aug. 1 of last year, regulates according to the risk level over the entire lifecycle of AI systems. Global big tech companies like Google, OpenAI, and Meta have publicly expressed concerns that the EU's actions could hinder the development of the local AI industry.
Naver is expected to focus on mid-sized startups that have achieved some level of success locally in the future. According to last year's business report, Naver is currently conducting IT investments in Europe through five funds operated by its French subsidiary and Corelia Capital.
Since Wallapop is expanding its business not only in Spain but also in Southern Europe, including Italy and Portugal, it may become the cornerstone of Naver's operations in Europe. The headquarters is in Barcelona, and it is reported to have about 350 employees. Naver stated that it will integrate its technological expertise and operational know-how in search, advertising, payments, AI, etc., into Wallapop to provide a differentiated user experience for European consumers.
Meanwhile, Naver continues its global startup investments. In particular, last June, it established a local investment firm, Naver Ventures, in the United States. Lee Hae-jin, the chairman of the board, is reported to have led the establishment of Naver Ventures, which aims to discover and support startups of various nationalities and fields in Silicon Valley. The United States is a country of AI prowess attracting global talent.
Naver stated regarding the withdrawal from Station F, that it will conclude the first phase of activities related to 'DAEYU Europe startups,' including ending operations at Station F, and continue its activities into a new phase focusing on investments and support for startups in the next growth stage.