[Pickool] Toss Lab, Inc : Approaching Success in a Wild SaaS Market Situation

Pickool is a platform to let the accelerators, investors, and startups in the global market know and learn about the hidden and the high potential startups in the South Korea Startups Ecosystem by the deep dive articles or the deep dive analysis reports.


Toss Lab, Inc. – An enterprise communication SaaS “JANDI” provider – attracted KRW 14B (US$ 12M) investment as a Series B stage. Softbank Ventures, Atinum Investment, SV Investment, SparkLabs, Shinhan Capital, T Investment, and Must Asset Management participated in the Series C investment.

 

The business outlook

Toss Lab, Inc. is focusing on growing its business. Compared with its revenue in 2016, the revenue increased 6.4 times in 2019.

JANDI -the enterprise application for communication like a Slack -has 2 million users as of May 2020. As most enterprise SaaS startups target small and medium-sized businesses, JANDI has customer reference cases like LG CNS, CJ, and Nexen tire.

Their business performance is positive. The net revenue retention of Jandi is around 120%. The startup clients like Musinsa, Happycall, and Yanadoo are growing their business. As the business grows, the users of JANDI grow as well.

The conversion rate from free trial users to paid users is around 40%. The statistic is higher than that of Slack. Slack’s conversion rate is 30%.

JANDI Introduction Video. Source: YouTube

 

South Korea – The tomb of the SaaS business.

According to Gartner, the estimated public cloud service market is US$ 2.3B. The estimated SaaS market in South Korea is US$ 980M taking 42% of the total market. With this figure, the SaaS Market seems promising.

However, the SaaS market includes revenue from Microsoft Office products. The end of service on the legacy Microsoft Office is October this year. Microsoft is promoting its SaaS-based Office 365 while contracting the EA agreement. Microsoft Office takes 70% of the market share in South Korea. It is being estimated that last year’s Office 365 related revenue in South Korea was from US$ 400M to US$ 450M. Excluding the Microsoft Office 365 revenue, the market size is around US$ 430M to US$ 480M.

The customized and dedicated IT environment per client had been a barrier to expanding the SaaS business. Furthermore, except for some global companies like Samsung, LG, or HYUNDAI, most large enterprises were used to adopting on-premise based applications, not SaaS. Most of the SaaS vendors have recruited its sales account manager as the Samsung team or non-Samsung team. That is why the result by Toss Lab is meaningful from the market perspective.

 

The COVID-19 pandemic changed the flow.

Due to the COVID-19 pandemic, many companies were adopting the Work from Home policy. Unlike the legacy working environment, the communication and productivity tools were urgently demanded. Furthermore, the seniors and executives realized why the SaaS application is needed.

Started its business from South Korea, Toss Lab, Inc. focused on expanding to the APAC markets such as Japan, Malaysia, Taiwan, and Vietnam. The JANDI became the no.1 Communication and Productivity tool in the Taiwanese market as well. JP Lee, the head of the Korea team in Softbank Ventures, said, “We have invested Toss Lab to make them the Slack in Asian Market.”

Toss Lab will use the investment fund for its market expansion to the global market. The service will be upgraded with the marketing activity as well.

 

Who invested TossLab?

Stage
When
Amount
Who?
B Aug. 2020  KRW 14B (US$ 12M) Softbank Ventures, Atinum Investment,
SV Investment, SparkLabs,
Shinhan Capital, T Investment,
Must Asset Management
B Jan. 2018 KRW 5.5B
(US$ 4.6M)
KDB Bank, SBI Investment,
Daekyo Investment,
Evergreen Investment Partners
A Feb. 2017 KRW 2B
(US$ 1.7M)
Ascent Capital Advisors
A Jan. 2016 KRW 3B
(US$ 2.5M)
Qualcomm Ventures
Pre-A Sep. 2015 KRW 500M (US$ 420k) Qualcomm Ventures
Seed Nov. 2014 KRW 2.1B
(US$ 1.8M)
Softbank Ventures,
Cherubic Ventures

 

By Philip Lee

Founder & CEO of Pickool Has various experiences in Korean Telco, IT advisory service, Global SW firm, and Late-stage start-up. He believes that transparency makes our society and our ecosystem healthier and more fruitful

 

Original Article Source >>

 

Comments are closed, but trackbacks and pingbacks are open.

%d bloggers like this: