Naver's luxury resale platform KREAM is continuing to post losses amid a slowdown in sales growth. Its valuation is estimated to have fallen below 1 trillion won, slipping under the unicorn threshold. With momentum for an initial public offering once floated now weakened, the slowdown across the online luxury platform market is raising questions about potential shifts in Naver's investment strategy.
◇ KREAM faces pressure from weak profitability and falling valuation
According to the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART) on the 22nd, KREAM's sales last year were 202.5 billion won, up 14% from a year earlier. However, compared with year-over-year sales growth rates of 166% in 2023 and 45.3% in 2024, the pace has slowed.
Profitability also worsened. Since its incorporation in 2021, KREAM has not generated an operating profit even once. Operating losses narrowed from 86.1 billion won in 2022 to 40.8 billion won in 2023, 8.9 billion won in 2024, and 8.1 billion won last year, but the company remains in the red.
Last year's net profit of 135.5 billion won is an accounting gain reflecting the fair value gain on the redeemable convertible preferred share (RCPS) liability and is unrelated to actual cash inflow. Analysts note this is a book gain arising as the assessed value of the liability declined along with the drop in valuation, and it differs in nature from revenue generated through operations.
KREAM marked down the RCPS liability fair value from 552.2 billion won at the end of 2024 to 410.6 billion won last year. Because RCPS are structured to capture gains by converting into common shares if the valuation of the company rises, a decline in fair value is interpreted as a signal that investors have lowered their expectations for future valuation upside or an IPO.
Earlier, when KREAM raised funding in 2024, it was valued in the low 1 trillion won range, drawing attention as the first unicorn among resale platforms. Recently, however, based on the RCPS fair value, its valuation appears to have fallen to around 780 billion won. That is why some say it is now below the unicorn threshold.
◇ Restructuring across resale and luxury platforms… BALAAN ultimately went bankrupt
KREAM's slump is tied not only to company-specific issues but also to a broader stagnation across online resale and luxury platforms. After the end of the pandemic, consumption of luxury goods and limited editions declined, and coupled with high inflation, the market has continued to contract.
SLDT, which operates Musinsa's resale platform "Soldout," recorded a loss of 3.4 billion won last year (before the merger). Musinsa moved to merge its money-losing subsidiary SLDT at the end of 2024. At the time, SLDT declared an emergency management regime and was pursuing a turnaround.
The online luxury platform industry is also revealing structural limits. During the pandemic, restrictions on overseas travel and department store visits drove a short-term surge in online luxury consumption, but results later deteriorated due to a domestic downturn and intensified competition among platforms.
BALAAN, regarded as a first-generation luxury platform, struggled with management woes and ultimately went bankrupt last month. BALAAN applied for corporate rehabilitation in March last year due to delays in settlements to marketplace vendors, but it failed to secure funding and was forced out of the market.
Along with BALAAN, Must It and Trenbe—collectively dubbed "Meotbal"—are also struggling to achieve profitability. Must It has posted losses of around 10 billion won every year since 2021, and recorded about an 7.9 billion won operating loss in 2024. Trenbe reduced its operating loss last year from 3.1 billion won to the 700 million won range, but it still failed to return to the black.
Meanwhile, KREAM was reportedly discussed for a merger with the U.S. resale platform StockX last year, but talks did not progress amid slowing growth. With the possibility raised of Naver selling its equity after forming a joint venture (JV) with StockX, some expect the company may move to reorganize its business structure or adjust its investment strategy.