FT : The Durov case is not about free speech

The Durov case is not about free speech
Telegram’s stand against censorship should not mean allowing criminal content

The hashtag #FreePavel, launched by Elon Musk, spread quickly after Pavel Durov’s recent arrest in Paris. Many of those who reposted it portray the Telegram founder’s detention as an assault on free speech. In any direct sense, it is not. Durov faces preliminary charges in a French probe of Telegram’s alleged failures to address criminality on its platform, including drug peddling and child sexual abuse material. A court may ultimately have to decide whether the app broke French law, and whether its Russian-born CEO can be held responsible.

US conservatives and Silicon Valley entrepreneurs have found themselves in strange concert with Russian bloggers in alleging that Durov’s detention shows European tech regulation — certainly more hands-on than the US variety — is on the road to censorship. Senior Russian officials, among Telegram’s most avid users, claim Paris is trying to force Durov to hand over the app’s encryption keys. Top marks to Moscow for gall: Durov has said he fled Russia in 2014 and sold his VKontakte network to Kremlin-friendly buyers after refusing demands to share Ukrainian user data. Russia tried to ban Telegram in 2018.

The app’s distinctive ethos and structure reflect Durov’s Russian experiences, and explain the scrutiny it is now under. It rejects anything it sees as censorship or interference, resulting in much lighter content moderation than most counterparts and a resistance to answering regulators’ or legal agencies’ inquiries — which forms part of the French prosecutors’ complaint. Telegram’s privacy policy says it would disclose user details if a court order confirmed they were a “terrorism suspect”, but adds: “So far, this has never happened.”

These principles have made Telegram an important haven for citizens and beleaguered political opposition groups under authoritarian regimes such as Belarus or Iran. They have also made the platform attractive to extremists and, say monitoring groups, those engaged in criminal activity.

Telegram has called it “absurd to claim that a platform or its owner is responsible for abuse of that platform”. Yet the law and most of society have for decades expected traditional telecoms networks to allow wiretaps under court order for law enforcement bodies pursuing crimes. Online networks should be expected to do the same, in clearly rule-of-law states such as France.

This is complex when data may now be held in servers across multiple jurisdictions. But the nearly 70 countries, including the US, that have ratified the Budapest Convention on cyber crime are already committed to harmonising laws and facilitating co-operation against electronic offences including the spread of child sexual abuse material — which extends to allowing foreign law agencies to directly query internet service providers. China and Russia are not members.

Given the scope for online platforms to act as hubs for illegal activity or content it is fair, too, to expect them to play their part in curbing such activities. Telegram says it observes EU laws and its moderation is in line with industry standards. Online researchers allege Durov’s platform has become a breeding ground for criminal and extremist groups largely because its restrictions are less tight than US rivals (though they have not entirely solved the problem either).

Free-speech advocates argue that acquiescing to law enforcement requests from democracies would open Telegram up to nefarious requests and threats from autocracies, which often call political opponents terrorists or criminals. But the platform would only enhance its credentials as a haven of free speech if it purged the content that any civilised society abhors. Even the US First Amendment, which gives broad protections to free speech, does not shield content or activities that break the law.

FT : Will US jobs data push the Fed into a deeper rate cut?

Will US jobs data push the Fed into a deeper rate cut?
Market Questions is the FT’s guide to the week ahead

The monthly US jobs data are always closely watched, but interest in Friday’s report is even more intense than usual. At stake, investors believe, is the likely size of the Federal Reserve’s first interest rate cut later this month.

Economists expect 163,000 jobs to have been added to US payrolls in August, according to a poll by Reuters, but individual forecasts range widely.

Last month Fed chair Jay Powell made it clear at the central bank’s annual symposium in Wyoming that he was focused on the risks of a weaker labour market, although he cautioned that the timing and pace of rate cuts still depended on future data.

“Payrolls are going to be a huge number for the markets as well as the Fed,” said Kevin Flanagan, head of fixed income strategy at WisdomTree. “The way that Powell framed things at Jackson Hole has now put payrolls front and centre.”

Investors are still unsure whether there will be a quarter-percentage point, or a half percentage point cut, at the Fed’s mid-September meeting. Futures suggest a quarter-point cut is most likely, but pricing implies a 30 per cent probability it will be deeper, according to the CME’s FedWatch tool.

Friday’s reading also takes on further weighting after July’s report undershot expectations. Then, payrolls rose by 114,000, far below forecasts of 175,000 new jobs, triggering a brutal market sell-off around the world. 

Another number that deeply undershoots expectations could once more fan fears the economy is slowing more sharply than thought and would boost market bets on a half-point cut later in the month. Jennifer Hughes

Will the FTSE 100 hit a record high?
Several European equities indices hit record highs in August and investors are expecting London’s FTSE 100 to join the club shortly.

The index of UK blue-chip stocks closed down by a couple of points at 8,376.6 on Friday, but it is just 70 points, or 0.8 per cent, shy of the record high of 8,445.8 set in May.

The benchmark has risen 8.3 per cent this year but languished in the past three months. However, sentiment is beginning to turn in its favour, ushered in by investors’ conviction that July’s general election marks the start of political calm and further signs that inflation is beginning to slow.

“After the recent elections, the UK is now among the countries with lower political uncertainty in Europe while having a similar growth outlook,” said Maximilian Uleer, head of European equity at Deutsche Bank. The bank has the FTSE down as its most favoured European index.

UK markets have narrow exposure to technology stocks, which has lessened the blow of recent volatility following earnings from US chipmaking giant Nvidia that triggered a pullback in Wall Street at the end of August.

The optimism has been boosted by the pound strengthening against the dollar, up 3.1 per cent year-to-date, helping allay fears for overseas investors that money into the market could quickly be eroded by a weak currency, according to Tineke Frikkee, head of UK equity research at Waverton Investment Management.

However, Frikkee cautioned that although the FTSE 100 was proving “more defensive” than US equities, it was still unclear over the pace at which interest rates would come down in the UK and how companies would react to a potential slowdown in major economies. Rafe Uddin

Will Turkey’s inflation rate continue falling?
Turkey’s inflation rate is forecast to have fallen sharply in August, bolstering policymakers’ confidence that a broad economic reform programme is slowing runaway price growth.

Consumer prices are expected to have risen at an annual pace of 53 per cent in August from 62 per cent the previous month, according to a FactSet survey of economists.

Price growth is also expected to have cooled significantly on a month on month basis after accelerating to 3.2 per cent in July as electricity price rises filtered through Turkey’s $1tn economy, economists said ahead of the report from the country’s statistical institute on Tuesday. 

Turkey has sharply tightened monetary policy as part of an effort to restore rational economic policymaking, which began after President Recep Tayyip Erdoğan was re-elected in May 2023.

The central bank has increased its main interest rate from 8.5 per cent in June 2023 to 50 per cent in an attempt to cool overheating consumer demand, which had led to severe economic imbalances, including a swelling current account deficit.


The new measures, which have also included tax rises, have shown early signs of success, narrowing the current account deficit and rebuilding central bank reserves that had been severely depleted by the previous unorthodox economic policies. Still, economic officials privately concede that much of the fall in inflation, which registered 75 per cent as recently as May, has been the result of last year’s very high baseline in prices.

The true test will come in the coming months, when investors will get a clearer picture of whether the policies are working. Turkish market participants expect inflation to fall to 43 per cent by year-end, according to a central bank survey. However, consumer expectations remain unanchored, with a separate poll by Istanbul’s Koç University showing households expect inflation of 96 per cent at the end of 2024. 

Miss Tweed : The film industry: Luxury brands’ new battlefield for soft power

The film industry: Luxury brands’ new battlefield for soft power

On Monday, Sept. 2, director Claude Lelouch, best known for his romantic 1966 film Un homme et une femme (A Man and a Woman), will receive the Cartier Glory to the Filmmaker Award at the Venice International Film Festival for his contribution to the film industry. The award ceremony will take place at the Palazzo del Cinema before a screening of his latest feature film, Finalement, starring Kad Merad, Michel Boujenah and Sandrine Bonnaire.

Cartier has been sponsoring the Venice International Film Festival since 2021. This allows it to hold glitzy parties attended by celebrities, or “friends of the maison,” as well as some of the jeweler’s best clients.

“This collaboration with one of the most renowned international cultural events builds on the Maison’s long-lasting commitments to preserve cultural heritage and support contemporary artistic creation,” Cartier says on the Venice film festival’s website.

Cartier’s ties to art go way back. In 1984, it became the first luxury brand to create a major art gallery with the launch of the Cartier Foundation for Contemporary Art. At the time, CEO Alain-Dominique Perrin was worried the brand could be nationalized by France’s socialist government. His idea was to use art to shield Cartier from leftist politicians who attacked it as a symbol of the rich and the elite. Every other major brand would follow in his footsteps.

From Louis Vuitton to Prada and Hermès— today most big megabrands have an art foundation. Not only does it elevate their status — from a commercial venture to that of patrons of the arts — it reduces their tax bills, since donations to foundations are tax deductible.

After art, now comes film. The film industry is where luxury brands are investing a lot of money these days. The success of a brand has become tied to the strength of its relationship with major actors, producers and film festivals. Together with art, the film world now forms the bedrock of a brand’s soft power.

DESIRABILITY
As the luxury industry navigates its worst downturn in decades, the battle for visibility is greater than ever. Desirability is the name of the game. Sponsoring or co-producing feature films, dressing actors on the red carpet at festivals, creating so-called branded entertainment and investing in the production of films about the brand, its products and its history is all part of a multi-pronged strategy to use the film industry to feed that desirability — and hopefully lift sales.

This summer’s set of half-year results showed a continued polarization of the luxury sector. Only ultra-desirable brands such as LVMH’s Loewe, Prada’s Miu Miu and Kering’s Bottega Veneta continued to grow or remained stable. Weak ones such as Gucci and Ferragamo with unclear stories and inconsistent product assortments and pricing policies suffered a massive drop in sales. In the current tough environment, only the strongest brands survive.

According to data analytics company Launchmetrics, the ceremony for the Oscars this year generated 12% more MIV (media impact value) than all four Fall/Winter 24 fashion weeks combined. Cannes 2024 generated almost the same amount of MIV as the same four fashion weeks, which generated only 2% more.

Zendaya’s attendance at the Met Gala wearing Maison Margiela by John Galliano made waves on social media, but the star attending the Oscars generated 48% more MIV. Margot Robbie’s appearance at the Barbie Los Angeles film premiere, wearing Schiaparelli, generated over $2.1 million in MIV in 24 hours. This is more than half of the entire Schiaparelli FW23 show with $4.1 million in MIV.

Fashion and luxury brands know that if they build a closer relationship with the film industry, they will have an easier time recruiting actors and actresses who can act as ambassadors and boost visibility.

If a brand co-produces or sponsors a film, its “friendship” with the actors and actresses involved becomes stronger. The brand gets to direct some of the content as well dress the film’s heroes at red-carpet events such as the Cannes or the Venice film festival, invite them to events and sit on the front of their shows.

Investing in Hollywood also carries risks. “What if the film turns out to be terrible,” points out Georges Kern, CEO of independent watch brand Breitling. “Then you are stuck with your products featuring in a film that got bad reviews and that’s not good for the brand,” Kern told Miss Tweed on Friday at Geneva Watch Days.

“I get one email every day from Hollywood. They are all looking for money to produce films,” he said. For the moment, he said he had not received an offer worth the investment. Producers tend to ask for big amounts, usually at least $500,000 for a product to appear in a film. This is no small investment for a brand. Omega has had a long-running deal to feature in James Bond films and this has paid off for the watchmaker over the years. “If you are part of a Netflix series that is popular, then you know what you are dealing with. Otherwise, it’s difficult to tell what the future of a film will be,” Kern explained.

On top of having a person in charge of relations with VIPs, most brands including Chanel, Miu Miu and Dior now have a person who coordinates the brand’s relations with the film industry.

This person plays a key role in fueling a brand’s desirability. Take Chanel for example. The French megabrand recently supported Marcello Mio by Christophe Honoré, which was in the official competition at the Cannes Film Festival this year. They created costumes for the role played by Catherine Deneuve, in collaboration with costume designer Pascaline Chavanne, and provided financial support to the production. In 2023, Chanel provided some of the costumes for the film Barbie by Greta Gerwig.

Chanel is also accompanying the production of Lisa Immordino Vreeland’s next documentary dedicated to French artist Jean Cocteau. It includes a part on the friendship between Cocteau and Gabrielle Chanel.

This year, Chanel backed the restoration of Wim Wenders’ 1984 film Paris, Texas broadcast at the festival, creating an occasion for a soirée with clients around the event. It published an exclusive interview with Wenders for its own website and social media accounts. The brand has financed the restoration of many films and is the official partner of several festivals including the Deauville American Film Festival, the Villa Medici Film Festival in Rome, the Tribeca Festival, the Busan International Film Festival in Korea and the Biarritz Film Festival.

Chanel has a webpage called Chanel and Cinema on which it publishes interviews “in conversation with” famous actors like Catherine Deneuve and film directors such as Francis Ford Coppola.

SAINT LAURENT
Saint Laurent, owned by Kering, is another brand building a major presence in the film industry. Like Chanel, it sponsors films but it also has its own production arm called Saint Laurent Productions. In 2023, Saint Laurent was the associate producer of a spaghetti Western featuring Ethan Hawke and directed by Pedro Almodovar. The half-hour film did not generate much enthusiasm among film critics but the costumes designed by Saint Laurent creative director Anthony Vaccarello got a lot of praise.

This year, Saint Laurent backed three films presented at the Cannes festival: Emilia Perez by Jacques Audiard with Selena Gomez, Parthenope by Paolo Sorrentino with Celeste Dalla Porta and The Shrouds by David Cronenberg with Vincent Cassel and Diane Kruger.

American freelance film critic Benjamin Croll who writes for Variety and other film trade publications has noticed that luxury brands such as Saint Laurent tend to only co-produce films by celebrity directors and featuring popular actors. It is unlikely you will see the luxury brand backing a documentary film or a film with actors people don’t really know.

“These are the films that would have that kind of red carpet exposure for the house,” Croll told Miss Tweed about the three films Saint Laurent presented in Cannes this year.

Since 2019, Kering has secured its place in Cannes by setting up the Women In Motion Emerging Talent Award which includes a grant of €50,000 to support a film project. During the festival, Kering competes with Chanel and other major luxury sponsors like Chopard for hosting the most glamorous parties with the most “in-demand” celebrities whose photos and videos will go viral on social media.

Last year, the Pinault family who control Kering went up the value chain by acquiring a controlling stake in CAA, one of Hollywood's most powerful talent agencies. This strategic purchase — spurred by the Kering CEO’s celebrity actress wife Salma Hayek — gave Kering’s brands unparalleled access to a wide array of talent. Equally important, it allows Kering to tap into actors and filmmakers who can help it better compete in the new era of branded entertainment where brands create TV shows and films to market their products instead of using traditional film or photo ads.

Celebrity stylist Phillip Bloch, who has worked with Hayek and Halle Berry, watched how fashion and Hollywood have become increasingly intertwined over the years. In the 1990s, he recalls how luxury brands were not as organized as they are today. Back then, stars were doing their own shopping. Only a few brands like Prada, Valentino, Armani and Jimmy Choo had representatives in Los Angeles. “They didn't pay celebs to begin with. It was an honor,” Bloch said. “Now celebrities all have deals with brands.”

The CAA deal for Kering “was the thing to do,” Bloch argues. “Why don't we buy the agency? Then we own the talent. Then the money we give them comes back. How can you not get the celeb you want if you own the agency? It's a way for the money they are paying talent to come back to them,” added Bloch.

Fashion houses are also getting involved in financing films at an earlier stage— sometimes when the script has just been finished and the production and actors chosen. It gives them even more sway over the content. “Film is the ultimate medium for a designer because it shows the clothes in action,” said Bloch, who has made several films.

Mayhoola’s Balmain co-produced a TV series for Channel 4 in Britain called Fracture. The French brand provided all the costumes and the series carried the Balmain logo on the bottom right of the screen.

MEDIA COMPANIES
The coproduction of feature films is just one part of luxury brands’ marketing strategy. They also spend vast amounts on producing long and short films about their products and their designers, their craftsmen and their heritage. “Many have only one story to tell and it is about the beauty and the heritage of the brand,” says Clement Boisseau from creative agency BETC.

Films also allow brands to better control the narrative and feed the beast of social media.

Statistics show people spend more screen time watching videos than looking at photos or reading texts. Video is THE medium that is the most reposted and shared on social media platforms. Therefore, they impact a brand’s visibility the most. Some of the best in the field of short films for self-promotion include Celine— thanks to Hedi Slimane’s strong photographic eye – and Simon Porte Jacquemus, known for his zany adverts such as films of giant handbags rolling through the streets of Paris. Chanel and Dior have also produced numerous films to promote their products and their history. This year, Chanel released an ad directed by Inez and Vinoodh featuring Brad Pitt and Penelope Cruz to promote its 2.55 handbag inspired by Lelouch’s Un homme et une femme film.

In February, LVMH set up 22 Montaigne Entertainment to create short films and feature films about the heritage and stories behind the French group’s many brands.

“Luxury brands have become entertainment companies,” says Boisseau. “They publish their films on their own social media platforms and this has allowed them to create their own community with high engagement levels.” Indeed, today people spend more time browsing social media platforms than reading glossy magazines or watching television.

“Typical marketing avenues for luxury brands have been in steady decline over the past few years; , think full-page ads in glossy physical magazines, or well-respected newspapers,” said Matthew Bailey, Senior Principal Analyst Advertising at the global analyst and advisory firm Omdia.

Luxury and fashion brands have become an area of interest for many young consumers. “Actually, if you remove fashion and luxury from Instagram— you only have cats and dogs,” Pierre Denis, Jimmy Choo’s former CEO and fashion tech investor, said at Miss Tweed’s Luxury at the Summit in Val d’Isère in April.

AMAZON, NETFLIX
The arrival of the streamers like Netflix and Amazon has shaken up Hollywood and provided new opportunities for creating content. The parent of Saks Fifth Avenue recently acquired department store Neiman Marcus with Amazon's help. It plans to leverage the U.S. giant’s e-commerce technology but also its powerful content distribution. The deal could accelerate the move towards branded entertainment from luxury houses, argues Soumya Sriraman, the former head of Amazon Prime Video Channels.

“This next phase of brands, retail and advertising will determine how customers interact with their fix of luxury, and we can buckle up for a ride of shows that are brand luxuriant versus product nods and brand stories versus commercial ads,” said Sriraman.

With the current boom in ads created by generative AI software — as Miss Tweed reported in July, — creating exceptional films will become even more crucial to stand out from the crowd, media experts predict. Many brands also like to broadcast the “making of ” a short film or a photo shoot. Hermès was one of the first big luxury brands to exploit that genre.

Fashion and luxury’s love affair with the film industry looks here to stay. Not only does it increase visibility and desirability through highly “Instagrammable” parties during film festivals, it also gives privileged access to the most “bankable” stars. Connecting with the movie world allows brands to stay connected with popular culture and keep track of social change.

“It’s all about culture,” says LVMH boss Bernard Arnault, who was the first to coin the term two years ago during his group’s results presentation. Brands don’t sell products, they sell culture, a certain worldview, he argued. Many luxury bosses would agree with him.

Since 2012, Miu Miu has sponsored two women who make short films. The brand says its goal is to showcase women’s talent and creativity – just like Kering with its Women In Motion Emerging Talent Award. The two films, part of the brand’s Miu Miu Women’s Tales film series, were shown on Saturday during the Venice International Film Festival, with their directors and casts in attendance.

After creating art galleries, publishing books, sponsoring music, ballet and other forms of performing arts, forming literary circles (Chanel and Miu Miu), generating podcasts (Chloé and Chanel), film is what brands are spending increasing amounts of marketing money on. “Follow the money,” so the adage goes, to find out what’s really going on. These days, a lot of luxury money is going to Hollywood.

FT : Temu owner PDD builds $38bn cash pile as it denies investors payouts

Temu owner PDD builds $38bn cash pile as it denies investors payouts
Chinese online retailer accumulates biggest net cash position of any listed group not to pay dividends or buy back shares

The Chinese ecommerce group behind Temu, whose stock plunged this week after it ruled out investor payouts, has accumulated the largest cash pile of any listed company that does not pay a dividend or buy back shares

US-listed PDD Holdings is sitting on a $38bn net cash position, according to FT analysis, more than twice the size of the nearest contender, Elon Musk’s Tesla.

While PDD has soared in value as it expanded from China to at least 49 markets in the past two years, its hoarding of cash is regarded as a “red flag” by some investors, who say its financial statements are opaque and its communications sparse.

The Shanghai-based company’s share price fell 31 per cent this week after it warned that record profitability was likely to decline and ruled out dividends or buybacks “for the foreseeable future” in a conference call during which it took questions from only two analysts. 

PDD has attracted controversy for the rapid worldwide expansion of ultra-low-cost online flea market Temu, its treatment of staff and suppliers, and its limited financial disclosures as the group grew in size and stock market valuation to rival Alibaba. 

Most of the world’s large companies pay dividends or buy back shares, with even the acquisitive and dividend-averse conglomerate Berkshire Hathaway repurchasing billions of dollars in stock this year. 

In MSCI’s Investable Market Index, composed of about 2,800 constituents from 47 countries, there were 151 companies with more than $5bn of net cash on their balance sheet as of Wednesday, according to Bloomberg.

Of that cash-rich elite, only five do not pay dividends or buy back stock, an FT analysis found: PDD, Tesla, Chinese electric-car maker Li Auto, European payments group Adyen and GE Vernova, the electric turbine group spun out of GE in April.  



Large Chinese companies announcing new buybacks this week include a $5bn programme at JD, a long established rival to PDD, $1bn worth at food delivery group Meituan, and a $1.3bn facility at sportswear group Anta. 

PDD generated $6bn of operating cash flow in the second quarter, taking its holdings of cash and short-term investments to $39bn.

The company also has a further $9.3bn of longer-term investments, said to mainly include time deposits and debt securities that PDD declined to detail further. The total for cash and long-term investments is equivalent to 36 per cent of PDD’s $133bn market capitalisation. 

Following this week’s results, analysts at JPMorgan wrote in a note to investors that “disclosures by the company remained too limited to understand the drivers behind the financial numbers”, and that “investors are confused by PDD’s unclear guidance and investment strategy”. The bank retained its “overweight” recommendation towards the stock.

Two hedge fund investors with positions in other ecommerce stocks but not PDD both said they considered its lack of share buybacks a “red flag” that could signify potential issues with accounting or the quality of balance sheet assets. 

PDD told the FT that “each company makes decisions based on its unique circumstances and strategic considerations. To imply that there is a ‘red flag’ simply because Company A does not follow the same approach as Company B is, quite frankly, absurd.”

A spokesperson added that PDD encouraged investors with specific concerns to reach out to the company, and drew the FT’s attention to a letter to shareholders published in its 2018 prospectus. 

The letter said: “It is not easy to take the leap of faith believing in such an unconventional company, which strives to meet both economic and social needs of users, and to make a positive impact to the society.”

The Guardian : Internet prophet’: arrest of Telegram CEO could strengthen heroic

Internet prophet’: arrest of Telegram CEO could strengthen heroic image
Pavel Durov will probably use French legal disputes to position himself as a champion of free speech,

When Pavel Durov came under criticism from Russian regulators over the spread of pornography on the VKontakte social media platform he founded, the tech entrepreneur responded mockingly by changing his Twitter handle from “VK CEO” to “Porn King”.

More than a decade later, Durov’s anti-authoritarian stance and hands-off approach to moderation have landed him in more serious trouble.

On Wednesday, a court in Paris charged the 39-year-old with being complicit in the spread of images of child sexual abuse, as well as a litany of other alleged violations on the Telegram messaging app.

Since its launch in 2013, Durov has presented Telegram as a politically neutral refuge, free from government control and a haven for free speech. For years, he seemed unbothered by the increasing global regulations targeting tech companies and the growing criticism that his platform was being exploited for criminal activities and terrorism.

“It looks like he overestimated himself. Durov believed he had unchecked freedom and was too significant to be arrested. France thought differently,” said the Russian journalist Nikolai Kononov, one of the few reporters who has spoken to the tech billionaire on multiple occasions and authored a biography about him.

For now, Durov has avoided jail, out on a €5m (£4.2m) bail, but has been required to surrender his three passports – French, Saint Kitts and Nevis, and Russian – clipping the wings of a man known for rarely staying in one place for long.

Born in 1984 in the Soviet Union, Durov grew up in a family of intellectuals and was sent to a prestigious high school in St Petersburg. According to Kononov, Durov rebelled against power from a young age.

While learning to code in school, he hacked the system to make all the computers in the classroom display a photograph of the teacher with the caption “Must die”. He was banned from the computer lab for a month.

As a somewhat awkward teenager, Durov was said to possess immense self-confidence, bordering on a messianic belief in his own abilities. When friends gathered at a flat after high school graduation to discuss future careers, he told them, without a hint of joking, that he would become an “internet prophet”.

As his reputation as a computer wizard grew while at university, Durov was approached by two acquaintances who showed him an early version of Mark Zuckerberg’s Facebook. The group quickly decided to create a nearly identical Russian version.

To bring his vision to life, Durov enlisted the help of his older brother, Nikolai, a maths prodigy who won gold three years in a row at the International Mathematical Olympiad in the 1990s. The older Durov would later be recognised as the brains behind both VKontakte and Telegram.

With relatively little competition in the Russian market, VKontakte quickly grew to become the leading social networking platform in Russia as well as across the post-Soviet sphere.

VKontakte provided a user experience akin to Facebook but was specifically designed for the Russian-speaking audience. Its rapid growth was partly fuelled by the platform allowing the sharing and streaming of pirated music and films, and pornography.

Durov’s first test of his commitment to freedom came during the demonstration against Vladimir Putin that swept Russia in early 2012. Durov emerged as a hero of the liberal opposition by refusing to shut down groups on the site that were dedicated to organising protest marches. He further solidified his independent reputation when he refused to turn over data to the Kremlin on Ukrainian users during the 2013-14 Maidan marches in Ukraine.

But he gradually lost control of VKontakte to investors linked to Mail.ru, a company owned by a Russian oligarchy close to the Kremlin.

Durov decided to leave Russia, writing in his departing message: “Since December 2013, I have had no property, but I still have something more important – a clear conscience and the ideals I am ready to defend.”

Colleagues said Durov came up with the idea for Telegram while looking for a way to communicate safely with his team.

Telegram’s novelty was that it allowed huge chat groups, making it easier to organise people, like a slicker version of WhatsApp.

Its “channels” allowed information to be disseminated quickly to large numbers of followers in a way that other messaging services do not; they combined the reach and immediacy of a Twitter/X feed, and the focus of an email newsletter.

The app’s blend of usability and privacy has attracted a diverse range of users, from lifestyle bloggers to anti-authoritarian protesters, and has been instrumental in fuelling demonstrations in Iran, Belarus and Russia.

It has also increasingly become a refuge for extremists and conspiracy theorists, as well as a preferred tool for child abusers, drug gangs and terrorist groups.

In the business world, Telegram’s success, with nearly a billion users, demonstrated that Durov was much more than just a copycat artist.

“While VKontakte raised some questions about whether Durov’s success was due to his own merits or simply a replication of Facebook, the launch of Telegram was clearly a technological breakthrough on a global scale,” said Pavel Cherkashin, a venture capitalist who worked with Durov.

As Telegram evolved into a tech giant, Durov fostered a reputation as an eccentric, imperious figure. Obsessed with the film The Matrix, he saw himself and dressed like Keanu Reeves’ character Neo, as a coder with a mission.

Although he is often referred to as “Russia’s Zuckerberg”, his biographer Kononov notes that Durov drew inspiration from Apple chief Steve Jobs, who was at the height of his influence at the time.

“Durov, like Jobs, saw himself as an authoritarian visionary, who pushes his staff to the extremes”

Durov would occasionally publish self-help posts entitled “Rules of Life” on his Instagram account, advising his millions of followers to live a solitary existence, avoid alcohol and coffee, and refrain from overeating.

He also prided himself on owning minimal property, which he claimed allowed him to remain unanchored and maintain a mobile lifestyle, supported by a team of just 30 full-time engineers around the world.

Durov has kept details of his private life largely secret, though last month, he disclosed on social media that, as a sperm donor, he now has more than 100 biological children.

At the time of his arrest, after arriving in Paris by private jet, Durov was accompanied by 24-year-old Juli Vavilova, a Dubai-based crypto coach and streamer.

But while he has mostly managed to avoid the public scrutiny faced by top executives of other tech companies, such as Elon Musk and Zuckerberg, foreign governments have long sought to monitor Durov and win his favour.

The Guardian previously reported that Durov’s number was selected for surveillance using the Pegasus spy network, while the Wall Street Journal this week said French and Emirati spies hacked him in 2017.

At the same time, he seemed to have been wined and dined on multiple occasions by the French president, Emmanuel Macron, who had suggested Durov move his company to France.

“Durov felt that he was treated with respect in France, I don’t think he saw the arrest coming,” said a source close to the billionaire who asked for anonymity.

Durov obtained French nationality in 2021. Macron on Thursday said the decision “was taken as part of a fully assumed strategy, to allow women and men ... who make the effort to learn the French language and who develop wealth and innovation, who shine in the world, when they ask for it, to be given French nationality”.

Le Monde reported that the men had met on several occasions before Durov obtained a French passport. This request for French nationality was made by Durov after a lunch with Macron in 2018, the newspaper added, saying this had been confirmed by the Élysée Palace. During this lunch, the possibility of Telegram basing itself in France was mentioned.

Questions have been raised about the timing and circumstances of Durov’s detention, in particular, whether he knew that Paris had issued a warrant against him.

Some have speculated that Durov travelled to Paris aiming to resolve his legal disputes, while fervent supporters question whether he would ever voluntarily surrender himself.

However, most believe Durov will probably frame it as another chapter in his fight for free speech, positioning himself as a champion of the cause.

“From the very start of his career, Durov has emerged stronger after every attack against him, further solidifying his image as an anti-establishment hero,” said Kononov.

Barron's : The U.S. Wants to Stop the Kroger-Albertsons Merger. It’s Not the Fir

The U.S. Wants to Stop the Kroger-Albertsons Merger. It’s Not the First Supermarket Under Attack.

When Barney Kroger opened his first store in Cincinnati in 1883, people needed to make multiple stops to complete their grocery list—butcher, baker, cheesemonger. He put them all in one place, a super market.

Today, Kroger is America’s largest supermarket chain. And its proposed $24.6 billion takeover of No. 2 Albertsons, forming a 4,000-store, 48-state giant, would stifle competition and hurt both consumers and workers, the Justice Department argues in its lawsuit to block the merger.

Kroger says it’s a grocery small fry just trying to compete with the big boys.

That both sides have a point is a testament to the changing nature of America’s shopping habits. The once-dominant supermarket, that ubiquitous downtown presence that filled a family’s entire food needs, is now just one of numerous shopping options.

The beefed-up new Kroger would account for 13% of U.S. grocery bills, behind the 22% of market leader Walmart, a big-box store that sells a lot more than just food. Amazon, which doesn’t even rely on bricks-and-mortar stores, is the No. 2 food-seller. There are also drug, dollar and convenience stores to compete with.

A Kroger-Albertsons merger would be the latest and largest in an industry consolidation that has swallowed up so many of the nation’s beloved regional stores. Like the department store and the mall, the supermarket is becoming a niche player in America’s ever-changing retail landscape.

Barney Kroger played a key role by slowly converting his Great Western Tea Co.—for “persons hard to suit in teas and coffees”—into a one-stop store that included a bakery and butcher. He added private-label goods, including his mother’s homemade sauerkraut, and soon operated an expanding chain of Kroger Grocery and Bakery stores.

In 1929, Kroger peaked with 5,575 stores across Kentucky, Missouri and Indiana—more locations than the new combined Kroger-Albertsons would have. But, back then, Kroger wasn’t even the big fish of grocery. That was A&P.

“The Great Atlantic & Pacific Tea Co. has built up the greatest cash business in the world,” Barron’s wrote on Feb. 20, 1922, reporting that A&P’s $200 million in sales topped those of any other retailer—not just food-sellers—including Sears, Roebuck and Woolworth.

“In any sizable town or city east of the Rockies,” Barron’s wrote, “the A&P store may be found.”

A&P would remain America’s top retailer into the 1960s, as supermarkets covered the country. Safeway dominated west of the Rockies, but many regional chains and even single stores, like Kilroy’s Wonder Market of Glen Rock, N.J., thrived.

King Kullen of Queens, N.Y., founded in 1930 by a former Kroger employee, is often cited as the first true supermarket by providing five key features: separate departments, self-service, discount pricing, chain marketing; and volume dealing. Billed as “the world’s greatest price wrecker,” King Kullen fit the tight family budgets of the Great Depression.

Joe Albertson got into the grocery game late, in 1939. But already 32 and a veteran of more than a decade at Safeway, where he had worked up to regional supervisor, Albertson knew exactly what he wanted—“Idaho’s largest and finest food store,” as he billed it.

The first Albertsons, in Boise, was joined by two more within a year, and the name soon spread throughout the Northwest. Then it got acquisitive, buying 14 Greater All-American Markets in Southern California in 1964, bringing its store count to 116. By 1967, Albertsons was up to “196 stores, with another 18 planned to be opened before next April,” reported the The Wall Street Journal.

But, even as the supermarket was extending its dominance across America, a new competitor was arising. The first Walmart Discount City opened in Rogers, Ark., in 1962.

Walmart “is the most consistent growth company around,” John Tilson of the Pasadena Growth Fund told the Journal in 1988, when the retailer was pushing for growth in groceries. “I have a lot of confidence that they’ll be able to succeed in it,” Tilson said.

By 1990, Walmart was the country’s most profitable retailer, and big-box stores like it and Costco had become the one-stop shop for a new age, stealing customers from retailers of everything from clothes to auto parts, sporting goods and much more.

Amazon, founded as an online bookseller in 1994, was just “taking small steps toward grocery-delivery service,” the Journal wrote in 2007. Small steps became a leap in 2017 with Amazon’s purchase of Whole Foods, and the Covid pandemic pushed more people into online shopping. It now sells as much food as Kroger and Albertsons combined.

Kroger and Albertsons are dinosaurs, remnants of an earlier age, when mom drove down to the supermarket and fit her whole family’s culinary needs in the back of the station wagon. Ralphs, Dillons, Harris Teeter, Vons, Safeway and even A&P have all been swallowed up. Kroger and Albertsons are among the last ones standing.

“Supermarkets are losing this food fight,” Kroger lawyer Matthew Wolf said in his opening statement at the antitrust trial. In the larger scheme of things, at least, he’s right.

Barron's : The North Face Parent Sees Big Insider Stock Buy

The North Face Parent Sees Big Insider Stock Buy

VF Corp. stock has recovered from 2024 lows, and its chair recently bought shares of the apparel firm.

VF shares set a 2024 low of $11 in late May after reporting a disappointing quarter. Shares have rallied more than 50% since, after VF hired Lululemon Athletica’s former chief product officer and arranged the sale of its Supreme brand, albeit at a loss. The surge hasn’t made up for ground lost in recent years. Shares of the parent of The North Face lost their footing in 2022 when they dropped 62%. VF stock lost another 32% in 2023.

VF Chair Richard Carucci paid $250,500 on Aug. 22 for 15,000 shares, an average price of $16.70 each. He now owns 230,178 VF shares, according to a form that Carucci filed with the Securities and Exchange Commission.

VF and Carucci declined to comment. A former chief financial officer of Yum! Brands, he has been a VF director since 2009. He has been a regular buyer of VF shares, most recently paying $345,000 in June for 25,000 shares, an average price of $13.78 each.

VF CEO Bracken Darrell has also made big bets on the company’s turnaround, making $1 million purchases of shares in February and June.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

>>> Barron’s Weekend Summary

Cover:
-The rising cost of parenthood is becoming prohibitive, which could negatively impact the economy. The falling birthrates and tighter immigration policies could lead to a population decline, causing a decline in the US economy. Both political parties have proposed policies to ease the financial burden on parents, with Ohio Sen. JD Vance proposing an increase in the federal child tax credit and Vice President Kamala Harris proposing initiatives to restore and expand tax credits for parents and increase the US housing supply. This could lead to a falling fertility rate, shrinking labor supply, diminished productivity and innovation, and declining wealth, all of which could threaten the US economy's long-term growth and vitality. The economics of child-rearing are looming large, with the crisis reaching a boiling point.

Interview:
-Dan Close, head of municipal fixed income at Nuveen, first became interested in the bond market while working as a caddie in 1995. He was convinced that the bond market held the keys to the global economy and that fixed income, not stocks, was where the true masters of the universe toiled. Close, who started in 2000 and has since moved from analyst to fund manager, is now the head of the $190B municipal bond complex at Nuveen. He spoke with Barron's about risks and rewards in the municipal market today, the potential impact of the coming presidential election, and some of Nuveen's best bond picks.

Tech Trader:
-Nvidia, a tech giant worth $3T, reported a year-over-year revenue growth of 122% to $30 billion in its fiscal second quarter, ending in July. The company's data-center business, driven by AI demand, grew even more at 154%. Nvidia's earnings report and commentary on its Blackwell graphics processing unit suggest that investors should ignore stock volatility tied to the near-term results and focus on the improving backdrop for the artificial-intelligence boom and Nvidia's next-generation GPU, which is well-suited for AI applications. The company's strong outlook for the current quarter and an additional $50 billion stock buyback program are expected to further boost growth.

The Trader:
-DexCom's stock has plummeted due to mismanaged investments in new growth opportunities, but shares could rebound with the introduction of a new product, Stelo, a new continuous glucose monitoring device for noninsulin Type 2 diabetics and prediabetics. DexCom's second quarter growth disappointed analysts, with earnings per share of 43 cents beating estimates by five cents. Sales of $1B grew 15% year over year, missing analyst expectations of $1.037B. Management reduced its 2024 sales-growth guidance, implying just over $4B in revenue for the year, forcing analysts to revise their 2025 sales estimates lower by 9% to $6.4B. The stock dropped 41% to $65 on July 26, and has barely rebounded since then.
-The SPDR S&P Biotech ETF has only returned 4.6% annually over the past five years, trailing the S&P 500's 16% return. Over 80% of the companies in the ETF are losing money, making it difficult for them to raise cash for research and trials. However, relief is on the way with the Federal Reserve's upcoming rate cut, which is expected to have a 65.5% chance of a quarter-point cut and a 34.5% chance of a half-point decrease. The ETF has a strong negative correlation to interest rates, meaning that when rates rise, stocks tend to fall, and vice versa. The universe of biotech stocks has also improved, with 693 small- and mid-cap biotechs being cash-flow negative during the second quarter of 2024, down from 949 in 2022. This suggests that troubled companies have delisted, been bought, or faded away, potentially stabilizing consolidation for troubled names.

Features:
-Tesla stock closed a difficult week of trading by rising 3.8% at $214.11, while the S&P 500 and Dow Jones Industrial Average gained 1% and 0.6%, respectively. Shares rose 0.3% on Thursday after William Blair analyst Jed Dorsheimer launched coverage of Tesla with a Buy rating, calling its energy-storage business an underappreciated asset. Tesla's energy storage and generation segment accounted for about 12% of second-quarter sales, growing 100% year over year. However, shares still gave up about 3% for the week. Shares of Chinese EV peer Li Auto fell on Wednesday after reporting better-than-expected second-quarter numbers.
-Intuitive Machines, a space infrastructure and technology provider, has seen a significant increase in shares after winning more business from the National Aeronautics and Space Administration. The company announced a $117M contract to deliver six science and technology payloads to the Moon's South Pole, which was awarded by NASA. The contract is part of NASA's push to contract with private companies for services, and NASA also uses SpaceX to launch and carry astronauts to the International Space Station. Intuitive completed one mission to the Moon's South Pole in February, marking the first time the US had landed a spacecraft on the lunar surface in over 50 years. As of Friday trading, Intuitive Machines shares have risen 89% this year, with shares trading as high as $13.25 a share. The company is expected to generate sales of around $223M in 2024 and $371M in 2025. The average analyst price target for Intuitive Machines stock is just under $10 a share. Through Friday trading, Intuitive stock was up about 95% year to date.

Europe:
-No update

Emerging Markets:
-Outgoing Mexican President Andres Manuel Lopez Obrador has proposed several constitutional amendments, including instituting elections for Supreme Court judges and potentially axing autonomous regulatory bodies. His plans could undermine democratic evolution in Mexico, leading to a return to the 1980s with one-party dominance. The move could also endanger the U.S.-Mexico-Canada Agreement, the free trade pillar up for review in 2026. The shift to elected judges could threaten the historic trade relationship, which relies on investors' confidence in Mexico's legal framework. The removal of independent regulators would also violate USMCA requirements. The September offensive could also put Mexico's investment-grade sovereign credit rating at risk, with Fitch Ratings already holding the country by a thread at BBB-. The deterioration in institutional quality could lead to a negative outlook or downgrade over the next 12 months.

Commodities:
-Copper's price has dropped by about 10% due to weak global economic activity, particularly in the U.S. and China. The metal is a major component of heavy machinery, cars, and other goods, and Chinese companies contribute to global copper demand. However, there are signs that the metal should continue climbing, with its price stabilizing just over $4/lb. after bottoming around $3.95 earlier this month. Commodity strategists at 22V Research predict that the metal will continue to rise, possibly to $5/lb.. They are highlighting several "pure play" companies that primarily generate revenue from copper mining, such as Antofagasta, Lundin Mining, Southern Copper, and Freeport-McMoRan. Shares of the first three companies have more than doubled since their lows in the fall of 2022, while Freeport stock has increased by about 75% over the same period. Copper stocks tend to rise faster than the commodity price due to fixed costs for miners, such as depreciation and interest expense.

Streetwise:
-A short seller called Hindenburg Research has been accused of pursuing artificial-intelligence company Super Micro Computer, which has seen its shares drop by 2.48%. The company has a history of controversies, including a report in May last year that inflated the unit price of publicly traded Icahn Enterprises by 75%. This year, Hindenburg has found "glaring accounting red flags" at Super Micro, including undisclosed related-party transactions. Super Micro has not commented on the allegations but has said it will delay its annual report to assess the effectiveness of its internal controls over financial reporting. Shares have fallen from a high of over $1,200 in March to a recent $440. The company's founder, Trevor Milton, was sentenced to four years in prison for securities and wire fraud.

TechCrunch : Watch out for these 10 hot startups from South Korea

Watch out for these 10 hot startups from South Korea

The South Korean startup ecosystem has grown over the last decade as major tech firms and venture capital from the West has sought to make inroads in the country. No surprise there: South Korea has long been one of Asia’s strongest economies. Startups here have enjoyed good access to funding, benefiting from Big Tech companies like Google, Meta, Qualcomm and Samsung setting up operations locally, as well as from dedicated venture arms. It also helps that the Korean government has spurred investment by setting up innovation hubs, incubators and accelerators.

Today, South Korea ranks ninth on the list of countries with the highest number of unicorns, per Statista, and its capital city, Seoul, is considered one of the top destinations to build a tech startup.

But like elsewhere in the world, startups here have not been immune to economic turmoil — tech firms have been cutting costs and laying people off to make the most of a diminished funding environment, startup valuations have dipped, and growth-stage funding has proved hard to come by. Asian startups in general have struggled to raise capital since the market turned in early 2022, and in 2023, venture capital investments in South Korea dipped to around 5.4 trillion KRW ($4 billion) from 6.8 trillion KRW ($5.1 billion) a year earlier, according to Statista.

It seems that 2024 will prove to be a pivotal year for many startups in the country, especially as some big names intend to go public either domestically or in the U.S. Here’s a list of the top startups to look out for:


Yanolja
  • Founder: Su-jin Lee
  • Total funding raised: $1.95 billion
  • Key investors: SoftBank Vision Fund, GIC, Booking, SkyLake Investment
  • Revenue in 2023: $578 million (766.7 billion KRW)
A travel booking platform founded in 2005 by Su-jin Lee, Yanolja is best known for revisiting and pivoting the concept behind love hotels in Korea — turning them from places known best for amorous assignations (rented for as little as one hour) into attractive short-term rental options for hip young people and travelers. Today, it has operations in more than 200 countries.
The startup joined the unicorn club in June 2019 with a $180 million Series D round led by Singapore’s sovereign fund, GIC and Booking. And in 2021, SoftBank Vision Fund II invested about $1.7 billion in a Series E that valued the startup between $7 billion and $9 billion.

Earlier this year, Yanolja set up a subsidiary in Manhattan, Yanolja US, to speed up its move toward a Nasdaq listing. Last December, the company hired Alexandre Ibrahim, who had a stint at the New York Stock Exchange, as its new chief financial officer. Yanolja is reportedly preparing to raise $400 million in its initial public offering in the U.S., which could value the company between $7 billion and $9 billion.

However, Singaporean e-commerce platform Qoo10’s liquidity crisis has emerged as an important variable in Yanolja’s listing on the Nasdaq. Yanolja sold Interpark Commerce to Qoo10 in April 2023 and was promised to be paid $127.8 million in installments by 2026, but Yanolja has not yet received the remaining amount.


Viva Republica (Toss)
  • Founder: Seung-gun Lee
  • Total funding raised: $1.34 billion
  • Key investors: Alkeon Capital, Altos Ventures, Aspex Management, Bond Capital, Goodwater Capital, GIC, Greyhound Capital, Kleiner Perkins, Korea Development Bank, PayPal, Qualcomm Ventures, Ribbit Capital, Sequoia China
  • Revenue in 2023: $994.1 million (1.37 trillion KRW)
Seung-gun Lee, a former dentist, founded Viva Republica in 2015, the company behind the finance super app Toss, because he was fed up with the complexity of South Korea’s online payment systems. Lee was apparently not the only one tired of jumping through hoops to make payments, and his app quickly took off. Three years later, Viva Republica hit unicorn status after raising $80 million. The company was last valued at about $7 billion (9.1 billion KRW) in December 2022 after a $405 million Series G round. Today, Toss has more than 19 million monthly active users.

Earlier this year, Viva Republica hired advisers to go public next year in South Korea. It posted revenue of $994.1 million (1.37 trillion KRW) in 2023, and the company said it is likely to reach profitability this year.

Kurly
  • Founder: Sophie Kim
  • Total funding raised: $761 million
  • Key investors: Anchor Equity Partners, Aspex Management, CJ Logistics, DST Global, Hillhouse, Hugh Ventures, Mirae Asset Venture Investment, Sequoia Capital China, SK Networks, Translink Capital
  • Revenue in 2023: $1.5 billion (2.07 trillion KRW)

Kurly has harbored dreams of an IPO for years, but it may finally be able to resume its listing plan.
Riding high on pandemic-driven tailwinds, the grocery delivery service initially planned to list in the U.S. in 2021. But then it shelved those plans in favor of an IPO in Seoul in 2023. Those plans ended up getting shelved, too, after the IPO window failed to reopen fully in 2023.
The company last year started diversifying its offerings, selling everything from high-end cosmetics to personal care products and supplements as it sought to bolster its revenue and gross merchandise volume ahead of its IPO.
But an IPO may be on the cards soon: Kurly recorded its first profitable month in December 2023, marking a significant milestone since its establishment in 2015. The company has long expressed its intention to pursue a listing after becoming EBITDA-positive.

Kurly was last valued at around $3.3 billion when it raised a $210 million pre-IPO round in December 2021, but reports suggest the company’s price tag has since shrunk to $669 million.

Dunamu
  • Founder: Hyoung Kim and Chi-hyeong Song
  • Total funding raised: $522 million
  • Key investors: Anchor Equity Partners, Altos Ventures Management, Hana Financial Group, Hanwha, Stonebridge Capital, Woori Technology Investment
  • Revenue in 2023: $751 million (1.02 trillion KRW)
Dunamu, the operator of Seoul-based cryptocurrency exchange Upbit, started as a stock trading service in 2012 and launched a crypto exchange in 2017. And in 2021, it became the first company to acquire a virtual asset service provider (VASP) license in South Korea.

Currently South Korea’s largest cryptocurrency exchange operator, Dunamu briefly enjoyed a juicy valuation of about $17 billion in 2022, when the crypto industry was still riding high. But as the hype around crypto faded in 2023 following the collapse of Luna and FTX, the company’s value similarly plummeted to $2.2 billion.
Dunamu saw an uptick in profit in the previous year, stemming from the recovery of cryptocurrencies like Bitcoin. This resulted in a net profit of approximately $594 million in 2023, reflecting a 515.4% increase from the previous year. Nevertheless, the company has encountered obstacles in diversifying its revenue sources and managing losses within its subsidiaries. Dunamu is reportedly aiming to go public on the Nasdaq.

Musinsa
  • Founder: Man-ho Cho
  • Total funding raised: $330 million (~ 430 billion KRW)
  • Key investors: IMM Investment, KKR, Sequoia Capital and Wellington Management
  • Revenue in 2023: $662.5 million (883 billion KRW)
Along with its Kakao’s fashion platform Zigzag, Korean retail giant Shinsegae’s W Concept, and Naver-backed Brandi, Seoul-based fashion marketplace Musinsa is one of the biggest and most popular fashion marketplaces in South Korea. It offers more than 8,000 local and foreign fashion brands spanning diverse categories, including casual, sports and luxury to 13 million users.

The startup claims its annual GMV crossed $2.35 billion (3 trillion KRW) in 2022 and that its revenue hit $662.5 million in 2022.
The company is reportedly in talks with investment banks to run its initial public offering in South Korea in 2025. Founded in 2012 by CEO Man-ho Cho, the Korean fashion platform raised a $190 million Series C round led by KKR that valued it at approximately $2.76 billion in July 2023.

Danggeun Market
  • Co-Founders: Gary Kim, Paul Kim
  • Total funding raised: $205 million
  • Key investors: Altos Ventures, Aspex Management, Capstone Partners, DST Global, Goodwater Capital, Kakao Ventures, Reverent Partners, SBVA and Strong Ventures
  • Revenue in 2023: $96.3 million

Founded in 2015 by Gary Kim and Paul Kim, Danggeun Market runs Karrot, the hyperlocal marketplace app for owned goods. The platform has operations in South Korea, Canada, the U.K., the U.S. and Japan, and raised $162 million in a Series D round at a valuation of $2.7 billion in 2021.
The company posted its first profit in 2023 on the back of strong user growth in the U.S. and Canada. The company has since been expected to go public, but its CEO Gary Kim said in May that the company would consider an IPO after building a stronger financial base.

Bucketplace (O!House)
  • Founder: Seungjae Lee
  • Total funding raised: $261 million
  • Key investors: BRV Capital Management, Capstone Partners Korea, Industrial Bank of Korea, KB Investment and KB Investment & Securities
  • Revenue in 2023: $181 million
Founded in 2016, Bucketplace‘s home decorating and interior app OHouse started off simply as a community of people sharing interior design content. Today, the company is offering a variety of services that encompass almost everything involved in the residential space, ranging from home improvement, home repairs and maintenance to furniture delivery, moving services and even a garbage can pickup service.

The company last raised a $182 million Series D round at a valuation of $1.4 billion in 2022. It recently turned down an investment from China-based e-commerce giant Alibaba, according to local media reports.
Bucketplace’s business model is similar to Houzz, a California-based home remodeling software platform that’s preparing to go public as early as this year.

Moloco
  • Founder: Ikkjin Ahn, David Sehyuk Park
  • Total funding raised: $200 million
  • Key investors: DAOL Ventures, Draper Athena, EDBI, Fidelity Management & Research Company, Mirae Asset, Samsung Ventures, Smilegate Investment, Tiger Global Management
  • Revenue in 2023: $300 million

Moloco, an adtech startup that uses machine learning tech to build mobile campaigns, serves mobile app developers in a wide range of industries, like gaming, social networking, e-commerce, ride-sharing, food delivery and fintech, helping them turn their first-party user data into marketing, monetization and user acquisition campaigns.
The company was valued at more than $2 billion after EDBI, a Singapore-based private equity and venture capital arm of the Singapore Economic Development Board, acquired shares in the company from another investor.
The company had last raised $150 million in a Series C round led by Tiger Global Management at a valuation of $1.5 billion in 2021.

Moloco intends to pursue a public listing on the Nasdaq and is currently assessing the appropriate timing for its initial public offering, CEO Ikkjin Ahn said during a press conference in Seoul in December 2023.

ZigBang
  • Founder: SungWoo Ahn
  • Total funding raised: $248 million
  • Key investors: Altos Ventures, BlueRun Ventures, Goldman Sachs Investment Partners, Korea Development Bank, Hana Financial Group, and IMM Investment
  • Revenue in 2023: $97 million
ZigBang, a South Korean proptech startup, raised approximately $77 million (100 billion KRW) in Series E funding at a valuation of about $1.8 billion (2.5 trillion KRW) as its pre-IPO investment from the Korea Development Bank, IMM Investment and Hana Securities in 2022. It acquired a smart home business from Samsung SDS in January 2022 before getting Series E funding to enter the smart home industry.
The Seoul-based real estate platform has been in the red for three years in a row, which is in line with the state of the real estate market in the country.

Korea Credit Data
  • Founder: Kelvin Dong-ho Kim, Seong-ho Lee
  • Total funding raised: $196 million
  • Key investors: D-Camp, Fiserv, GS Holdings, Hanwha Life, Kakao, KB Securities, Kclavis, KT Investment, LG Uplus, Morgan Stanley Tactical Value, QUAD, Pavilion Capital, Playmake Ventures, Samsung Fire & Marine Insurance
  • Revenue in 2023: $103 million
Founded in 2016, Korea Credit Data (KCD) is a Seoul-based fintech startup that offers an array of services for 2 million small- and medium-sized enterprises (SMEs) merchants in Korea. KCD launched its flagship service, Cashnote, a bookkeeping app for SMEs, in 2017 to enable SME owners to track a comprehensive overview of cashflow, including revenues, credit card sales, expenditures, sales ledgers, and policy information.
The startup raised $77 million (100 billion KRW) in funding at a valuation of approximately $1 billion (~1.3 trillion KRW) from investment funds managed by Morgan Stanley Tactical Value in August 2023. KCD is reportedly planning to go public in 2025.