Korea’s No. 1 flea market app Karrot expands services across Canada

Danggeun Market Inc., South Korea’s largest online flea market service provider, is expanding its online used-goods marketplace app Karrot across Canada.

The move is being closely watched by online flea market app operators as Danngeun is taking the neighborhood buy-and-sell business model to sparsely populated regions — a pioneering practice. 

In Canada, Danggeun has up to now been offering its Karrot app service in large cities, including Toronto, Vancouver, Calgary and Edmonton. The company now offers the service across the country except for the French-speaking province of Quebec.

Danggeun’s decision to significantly expand its service areas in Canada follows a rapid increase in the number of Karrot app subscribers, which surpassed 1 million last month.

Recently, the Karrot: Buy & Sell app ranked third in Canada, beating global social network service FaceBook on Apple’s App Store, according to Danggeun.

Kim Yong-hyun, the company’s co-founder and co-CEO, resides in Canada, where he is leading its expansion push across North America.

“For a hyperlocal service like Karrot to be successful in overseas markets, it requires more time and effort than in Korea because it must fully reflect the cultural differences and public sentiment of the region,” said a company official.

DANNGEUN MEANS CARROT IN KOREAN

Danggeun means carrot in Korean, but is also short for “in your neighborhood.”

Established in 2015 by Kim Yong-hyun and Kim Jae-hyun, former co-workers at Kakao Corp., Korea’s largest mobile messaging app, Danggeun went abroad by launching the app in Britain in November 2019. It then introduced the service to Canada in September 2020, the US in October 2020 and Japan in February 2021.

The online used-goods marketplace connects buyers and sellers in the same neighborhood. Early on, it limited direct transactions to those living within 6 km of each other to reduce fraud.

It now allows users to make deals with others within a 10-kilometer (6.2 miles) radius in Korea and Japan while supporting transactions for customers up to 50 km apart in the US and Canada.

To enhance the website’s credibility, the company provides verification services based on a user’s location, vetted through a global positioning system (GPS).

It also operates a review system to allow users to rate their counterparts and offer recommendations, using machine learning algorithms.

INVESTORS

In 2021, Danggeun increased its valuation to $2.6 billion after raising $153 million from major venture capital funds.

Global investors in the company at the time included DST Global, Aspex Management and Reverent Partners, as well as existing investors such as Goodwater Capital, SoftBank Ventures Asia, Altos Ventures and Kakao Ventures.

Dangguen plans to send business experts from its headquarters to Canada to sharpen local employees' business skills and expand coverage areas.

“It will take a long time to succeed in overseas markets, but we will be persistent in taking on challenges,” said Danggeun CEO Hwang Do-yon.

Write to Joo-Wan Kim at kjwan@hankyung.com
In-Soo Nam edited this article.