Lee Hae-jin, NAVER founder and board chair, is known as a "quiet leader," a reclusive manager, but he is famous for "bulldog leadership" that pushes hard when decisiveness is needed. He has shown his bulldog spirit once again. NAVER Financial and Dunamu, which operates Upbit, the world's No. 3 virtual asset exchange, decided to join hands through a stock exchange. This is a governance restructure that cedes NAVER's (including preferred shares, 75%) position as NAVER Financial's largest shareholder to Dunamu Chairman Song Chi-hyung. Song is currently the largest shareholder of Dunamu with a 25.53% stake.
The industry is even floating a scenario in which NAVER Financial and NAVER merge in the future. If this scenario becomes reality, experts say Song would end up with a NAVER equity stake of about 5% or more, higher than Chair Lee's 3.7%. Since returning to the company in March for the first time in seven years, Lee has been showing his profile as a "game changer" shaking up the business structure. This appears aimed at solving the issues of future growth engines and succession.
On 25th, NAVER said it is discussing a comprehensive stock exchange with Dunamu. The deal is reportedly structured so that NAVER Financial issues new shares to Dunamu shareholders, and in return, NAVER Financial comes to own the shares held by Dunamu shareholders. The market values NAVER Financial at 3 trillion–7 trillion won and Dunamu, an unlisted firm, at around 12–15 trillion won.
◇ If NAVER and NAVER Financial merge, Song Chi-hyung's equity surpasses Lee Hae-jin's
In theory, it is hard to see Song as having joined hands with Lee merely for a tie-up with NAVER Financial. Listing on the U.S. Nasdaq could command a higher valuation and create synergies, but Dunamu's corporate value is larger. This has led to speculation that Lee first proposed that Song become NAVER Financial's largest shareholder, and then, as a second step, rise to become a key member and major shareholder of NAVER.
Because both NAVER Financial and Dunamu are currently unlisted, the merger ratio will vary depending on how the two corporations are valued. The two companies say they are still discussing the merger ratio and method. However, some say the equity exchange is being discussed in a direction where Song, Dunamu's largest shareholder, would overtake NAVER to become NAVER Financial's largest shareholder. This would be possible if Dunamu's valuation exceeds that of NAVER Financial. Going a step further, a scenario is being raised in which NAVER and NAVER Financial merge in the future; in that case, Song could be listed as a major NAVER shareholder by virtue of the NAVER Financial equity he has already secured.
An industry official said, "Given Dunamu's recent annual sales, operating profit, and net worth, it would have been difficult for Chairman Song to agree to a big deal without the carrot of becoming (NAVER's) largest shareholder." Another industry official said, "If NAVER and NAVER Financial merge, Song's NAVER equity is expected to be around 5%, higher than Chair Lee's, and in that case the two could potentially manage the company together."
This scenario is being raised because Lee is not a manager obsessed with securing equity. Although he is NAVER's founder, Lee currently holds a 3.72% stake, making him the third-largest shareholder after the National Pension Service (8.98%) and BlackRock (6.05%). There was a time when Lee's NAVER equity topped 10%, but he has never been fixated on equity. Even in 2017, when he was designated the group owner (the "same person" under the Fair Trade Act), he met then-Fair Trade Commission Chair Kim Sang-jo and, citing his low stake, described NAVER as a "large corporation without a group owner."
◇ If NAVER joins hands with Dunamu, it can secure revenue and technology
The reason Lee is trying to join hands with Song even at the cost of shaking up NAVER's governance is a sense of crisis about the future. NAVER spans search, shopping, Pay, and webtoons, but its future is uncertain. The influence of search portals is shrinking. NAVER's share of revenue from search exceeded 50% as recently as 2020, but stood at 37% last year. Shopping, too, faces a formidable domestic rival in Coupang. Its artificial intelligence (AI) business is losing ground to global Big Tech. NAVER Webtoon listed on the U.S. Nasdaq last year, and in 2022 it acquired U.S. secondhand fashion platform Poshmark, but these are insufficient to push as the group's new growth engines. The fact that Lee introduced a performance-centered HR system called the level system after returning to the company this year starkly shows the urgency he feels.
From Lee's perspective, Dunamu is both an alternative that can capture revenue and technology and a springboard to leap into a digital finance platform. If NAVER and Dunamu join forces, they are likely to take the No. 1 spot in the distribution of stablecoins and cryptocurrencies, bridging the physical and digital economies. Offline payments linked to coin wallets would also become possible. By issuing a stablecoin and linking it to NAVER Pay, they could also secure real-world payment use cases for the stablecoin. In the long term, they could preempt the domestic won stablecoin market and offer investment returns from using deposit reserves secured with stablecoins as collateral, as well as loan services backed by stablecoins. Experts say this deal should be noted not for short-term earnings improvement but for securing long-term business growth drivers.
◇ Senior-junior ties in Seoul National University's computer science department… succession likely in mind
Lee is an elite developer who graduated from Seoul National University's computer science department and earned a master's in computer science from KAIST. He has shown an excellent touch not just in handling technology but in connecting technology and the future as a planner. In particular, whenever NAVER made a big leap, he employed merger and acquisition (M&A) strategies. A prime example is NHN, created by merging NaverCom, which Lee built, with Hangame, created by Kakao founder Kim Beom-su. At the time, the portal market was dominated by Yahoo Korea and Daum, but NAVER launched the "Knowledge iN" service, where users ask and answer questions themselves, and established itself as a life platform. Lee also led the management integration of Yahoo Japan and LINE.
What made this deal possible were the academic ties between Song and Lee. Both graduated from Seoul National University's computer science department. When he founded Dunamu, Song started with support for office space from SNU, and his school spirit is strong. Added to this is the fact that Lee, born in 1967, cannot help but consider retirement and succession. Song, born in 1979, is 12 years younger than Lee, a zodiac cycle apart.
Experts also see the change in NAVER Financial's largest shareholder as meaning not just a simple governance shift but a change in the party that can exert real influence over the company's strategic decision-making authority and business direction. Kim Jun-ik, a professor of business administration at Konkuk University, said, "This merger is a case where Chair Lee Hae-jin and Chairman Song Chi-hyung built a strategic alliance mediated by finance and virtual assets. In the short term, it carries significant meaning for business expansion, but in the long term it can be interpreted as a move tied to how NAVER intends to shape its next-generation leadership structure," adding, "From Lee's perspective, even if his control weakens as a shareholder, it is a choice that both secures NAVER's future growth engines, long deemed uncertain, and eases the burden of succession."