"They went too far, even bringing in Jun Ji-hyun."
Zigbang, South Korea's largest proptech company, has sunk deep into the red despite a high-profile marketing campaign fronted by Jun Ji-hyun, widely regarded as the top commercial endorser in the advertising industry. The company, once valued at 2 trillion won ($1.33 billion) and celebrated as a "proptech unicorn," has seen its valuation fall to roughly one-eighth of that peak.
Zigbang was once held up as a model startup, drawing admiration across the industry for its generous salaries and employee welfare benefits.
According to an audit report filed Saturday with the Financial Supervisory Service's DART system, Zigbang posted sales of 92.2 billion won and an operating loss of 12.1 billion won last year — its fifth consecutive year in the red. Operating losses had surged from 8.2 billion won in 2021 to 37.1 billion won in 2022, then reached 37.8 billion won in 2023. At least the deficit narrowed last year, offering some consolation.
As concern over the mounting losses grew, Zigbang separately disclosed its results on an EBITDA basis alongside its official figures, noting that its EBITDA deficit narrowed to 600 million won last year from 15 billion won in 2024. EBITDA stands for earnings before interest, taxes, depreciation and amortization.
In a bid to reverse its fortunes, Zigbang bet on Jun Ji-hyun to lift its brand image and drive adoption of new services at the same time — but the gamble has fallen short.
A US venture capital firm has valued Zigbang at 300 billion won. According to investment banking sources, Altos Ventures acquired roughly a 3 percent stake in Zigbang this year, investing 10 billion won at that valuation. That marks a nearly 90 percent drop from the 2.5 trillion won valuation the company commanded at its pre-IPO funding round four years ago.
Above all, an overly aggressive expansion strategy and a slump in real estate transactions have come back to haunt the company.
In July 2022, Zigbang acquired Samsung SDS's home IoT division, betting on the smart-home segment as a promising new revenue stream. The deal drew wide attention at the time as a rare case of a startup buying a business unit from a major conglomerate. The acquisition price was reported to be around 100 billion won. Costs climbed as the company pushed ahead with its expansion.
High labor costs and a near-total freeze in real estate transactions then pushed the company into financial difficulty. Most proptech firms rely on advertising fees paid by licensed real estate agents for their revenue, meaning a drop in property sales and jeonse transactions directly cuts into their income.
Meanwhile, Zigbang had once drawn industry-wide envy by hiring developers en masse, offering starting salaries of 60 million won and raising existing employees' pay by as much as 20 million won at a time.
park@heraldcorp.com
