Upstage, Megazone Cloud race toward IPOs before year-end

Upstage and Megazone Cloud, two companies that have emerged as standard-bearers of next-generation information and communications technology, are accelerating their pushes for initial public offerings before the end of the year.

Expectations are running high that the two firms — the first unicorns in the AI and cloud sectors, respectively — will enter an explosive growth trajectory once they complete their listings.

Their stock market debuts are becoming increasingly concrete, according to industry sources Thursday.

Upstage, the first unicorn in the AI sector, selected KB Securities and Mirae Asset Securities as lead underwriters in December last year, then added Swiss investment bank UBS to the underwriting syndicate. The company is expected to file for a preliminary listing review in the second half of this year.

Upstage was valued at 1.3 trillion won ($873 million) at the pre-IPO stage. At a recent investor relations session, its post-listing valuation was discussed at anywhere from 3.5 trillion won to as much as 5 trillion won.

The company has also wrapped up the business expansion needed ahead of its listing. After completing the acquisition of the web portal Daum, it announced last month the launch of "Upstage Company," an integrated entity linking its AI models, portal operations and AI agent platform. Upstage Company is structured around Upstage itself, AXZ — the operator of the Daum portal — and Timely, a general-purpose AI agent platform.

The market points to Upstage's solid foundational AI technology as its core competitive strength. The company has attracted cumulative investment of around 730 billion won and is actively expanding overseas. At a press briefing last month, CEO Kim Sung-hoon said more than 200 companies worldwide — including in South Korea, the United States and Japan — have adopted Upstage's AI. He added that new contract value in the first half of 2026 had already surpassed the company's total earnings for all of last year.

The addition of UBS to the underwriting lineup is widely seen as a strategy to attract overseas investors, particularly given the strong global appetite for AI-related investments.

Megazone Cloud CEO Yeom Dong-hun [Megazone Cloud]

Megazone Cloud, which has been making sweeping moves in the cloud sector, is also picking up the pace on its IPO preparations. The company is expected to file for a preliminary listing review as early as the third quarter.

Megazone Cloud has selected Samsung Securities, Korea Investment & Securities and JPMorgan as lead underwriters, with KB Securities, Bank of America and Citigroup Global Markets serving as co-underwriters.

Megazone Cloud became the first managed cloud service provider to achieve unicorn status in 2023. During its Series C funding round in 2022, it was valued at 2.4 trillion won. The market currently estimates the company's value at between 4 trillion and 6 trillion won.

A particularly encouraging sign for the listing is that profitability — long the sticking point holding back an IPO — has begun to improve in earnest. Megazone Cloud turned profitable last year, posting sales of 1.75 trillion won, operating profit of 230 million won and net profit for the period of 8.2 billion won.

"We are in an era where the axis of ICT technology is shifting to AI and cloud," an industry official said. "These will become the primary growth sectors, following legacy ICT businesses such as telecommunications and web portals."

sjpark@heraldcorp.com