Korean crowdfunding platform Wadiz swings to profit on biz expansion

[Courtesy of Wadiz]

Wadiz Co., a leading crowdfunding platform in South Korea, managed to swing to an operating profit for the first time since its inception in November 2023, thanks to its business diversification efforts.

According to industry sources on Tuesday, Wadiz posted its first monthly operating profit since its founding in May 2012 in November 2023.

Market watchers expect that Wadiz may achieve a quarterly profit this year, given the positive trajectory observed in the company’s recent performance.

Wadiz operates as an intermediary platform, connecting individuals or businesses seeking small-scale investments for their projects with a multitude of small investors.

This facilitates the production of goods, allowing SMEs and startups lacking sufficient funds to create products on a smaller scale.

Once a crowdfunding campaign surpasses 100 percent of its targeted funding goal, it is considered successful, and the project moves into the production phase.

Many startups that have successfully raised initial funds through Wadiz have gone on to expand their operations.

For consumers, it is a great way to get items that have not hit the market yet faster than anyone else. Wadiz’s transaction value is estimated to have reached 250 billion won ($187 million) last year, up by more than 16 percent on year.

Revenue reportedly increased from 34.2 billion won to 40 billion won during the same period.

Wadiz’s financial success is further driven by its foray into e-commerce with the launch of Wadiz Store in September 2021.

Wadiz Store allows businesses that have succeeded in crowdfunding to continue selling their products online, providing a continuous stream of revenue. The platform has seen substantial growth, with over 1,500 brands joining within two years of its launch.

As of January 2022, the platform offered more than 2,700 products, representing a 60 percent increase compared to the same period the previous year.

With a diverse product assortment, sales are growing at an average of 50 percent per quarter. Wadiz Store’s share of total Wadiz transactions has also increased from 2 percent in January 2022 to 13 percent in December 2023.

The recent boost in financial performance is also attributed to Wadiz’s strategy of expanding its presence in offline channels.

The flagship store, Wadiz Flagship Store Seongsu, opened in Seongsu-dong in Seoul, showcasing crowdfunding success products and popular Wadiz Store brands.

Covering diverse categories such as fashion, beauty, tech, food, and home living, the store allows customers to experience and purchase more than 350 products directly.

Wadiz is also actively collaborating with established distribution channels.

Since the beginning of last year, it has been selling products through Hyundai Home Shopping and Shopping Live. The company is also continuing efforts to showcase popular Wadiz-funded products on Lotte Home Shopping’s mobile TV.

According to market research firm Polaris Market Research, the global crowdfunding market is expected to grow from 23 trillion won in 2022 to 78 trillion won by 2030.