Korea Development Bank’s plan to invest 100 billion won ($89.4 million) in the nation’s latest internet-only bank backed by Viva Republica, the operator of fintech app Toss, is meant to keep local unicorns in the local market, the head of the state-run bank said.

The announcement follows the nation’s financial regulator’s decision last week to grant final approval to a consortium led by Viva Republica to launch and operate the nation’s third internet-only bank. Toss Bank will compete against K bank and Kakao Bank, the two existing internet-only banks here, after launching operations in September.

“We need to swiftly make future-oriented investments,” KDB Chairman Lee Dong-gull said during an online press conference held Monday.

“Critics complain about unicorns and startups going public on overseas stock markets and our country failing to enjoy the benefits –- it’s our business, which is why we need to scale-up,” he added.

Lee’s remarks pointed to recent concerns here of major Korean unicorns’ decision to go public or preparations to debut in the United States. E-commerce giant Coupang’s became listed on the New York Stock Exchange in March, while up-and-coming fresh food delivery platform Market Kurly is gearing up for its US debut later this year as well. The premium grocery delivery business has already designated Goldman Sachs, Morgan Stanley and JP Morgan as lead underwriters.

While the businesses’ decisions to debut overseas been applauded by many, concerns have been growing over the lack of attractiveness of the local stock market and its weakening presence. Some have been even calling the trend an “unicorn exodus.”

If the investment materializes, it would mark the first of such move by a state-run bank towards an internet-only bank here.

KDB has been focusing on fostering local startup and launched a special “scale-up venture capital” team early last year.

Toss Bank will focus on lending to people with medium and low credit scores, Viva Republica said.

In 2017, K bank and Kakao Bank kicked-off around-the-clock services without brick-and-mortar branches. The services gained more popularity and traction with the COVID-19 pandemic, catering to customers demanding less face-to-face contact.

By Jung Min-kyung (mkjung@heraldcorp.com)