|Image captured from Andar website / Courtesy of Andar|
By Anna J. Park
Three years after investing in "athleisure" clothing brand Andar, Shinhan Venture Investment and Kolon Investment made an early exit last month by selling their redeemable convertible preference shares (RCPS) to KB Investment.
According to industry sources, the two venture capital firms sold all their RCPS to KB for around an aggregate 3.6 billion won ($3.2 million), with Shinhan and Kolon receiving 2.1 billion and 1.4 billion won, respectively.
The two venture capital firms made a Series A investment of 50 billion won into the brand back in 2018 along with two other venture capital firms, NHN Investment and Smilegate Investment. The sports clothing company won an additional 200 billion won worth of investments throughout 2019 and 2020 from various other entities, and Echo Marketing joined by investing in December 2000.
Echo Marketing formed a strategic partnership with Andar, as the digital marketing firm exchanged equity worth 40 billion won for 400,000 of Andar's ordinary shares. Through the deal, Echo Marketing became one of the major shareholders in Andar with a 35.2 percent stake. In May, Echo Marketing acquired an additional 2.72 million shares ― 12.95 percent ― of Andar for 19.3 billion won, becoming the largest shareholder in the company.
Expecting Echo Marketing to bring about a turnaround at Andar, other Series A, and B, investors are holding onto their equity, converting their RCPS into common shares.
KB's late participation into the Andar investment last month by purchasing Shinhan and Kolon's RCPS is also attributed to the belief in Echo Marketing having a positive impact on the business.
Market watchers say Echo Marketing's stellar past track record of successfully discovering and increasing the corporate value of burgeoning businesses means the venture capital firm will stick with the Andar investment, expecting the valuation to rise through synergy. As seen in the cases of Glluga, a beauty business known for its self-nail brand "Ohora," and Daily and Co, a local consumer goods company known for "Klug" mini massagers, Echo Marketing boosts strategically-partnered-companies' business models with effective digital marketing, ranging from product planning and design to advertising.