Luxrobo Rejects Google's Acquisition Offer... Prepares for IPO, Now Pledges 'The Penthouse Cheongdam' as Collateral in a 'Struggle for Survival'

Promising edtech startup Luxrobo, which previously rejected a $100 million (approximately 140 billion won) acquisition offer from Google, is facing the greatest crisis since its founding. Although its estimated enterprise value once reached 230 billion won, it has now fallen into the swamp of capital impairment with accumulated deficits piling up to nearly 100 billion won. This company, which once enjoyed the full expectations of the market, recently saw its enterprise value plummet to the 70 billion won level during a paid-in capital increase process. The situation has grown so dire that CEO Oh Sang-hoon is struggling by putting up 'The Penthouse Cheongdam (PH129)', a luxury apartment he previously purchased with proceeds from selling old shares, as joint guarantee collateral to a bank for company borrowings.

Withdrawal of Samsung Securities-Managed IPO and Sudden Sales Decline

Luxrobo actively prepared to enter the KOSDAQ by suddenly changing its IPO underwriter from NH Investment & Securities to Samsung Securities in the past. In April 2024, the company appeared to be crossing the IPO threshold by receiving A and BBB grades from two professional evaluation agencies in the technology assessment for a special technology track listing, but ultimately failed to overcome snowballing deficits and concerns over poor performance, voluntarily withdrawing its preliminary listing application just three months after filing it in July of the same year.

The fundamental background of the IPO failure lies in the extreme sales volatility unique to B2B (business-to-business) and B2G (business-to-government) order-based businesses. Sales, which stood at 17.9 billion won on a consolidated basis in 2022, were boosted by the growth of the smart mobility sector, but as sales in this sector plummeted in 2023, total sales dropped to 12.4 billion won despite defending the export of overseas educational robots (MODI). In 2024, even exports to India, which were expected to play a major cash cow role, experienced massive returns and sales cancellations due to an external variable of 'customs regulation changes,' causing overseas sales to record a negative figure (-940 million won), and consolidated sales halved to 6.5 billion won (separate 4.9 billion won). Ultimately, in 2025, major orders completely dried up, and sales shrank to the 1.66 billion won level, a quarter of the previous year's level, receiving a report card that shows the company's normal business cycle has deteriorated.

A Catastrophe Brought by Nearly 100 Billion Won in Deficits and 57.8 Billion Won in Substantive Operating Losses

The company's financial condition is at a serious level. As of the end of 2025, Luxrobo's total accumulated deficit on its financial statements amounts to approximately 96.34 billion won. This massive swamp of deficit is the combined result of an accounting illusion known as 'derivative valuation loss' and 'structural core business deficit'.

Due to 15 types of redeemable convertible preferred shares (RCPS) issued while attracting multiple investments in the past, Luxrobo had to reflect massive derivative valuation losses as non-operating expenses on its books whenever its enterprise value rose. The accumulated non-cash losses on the books alone amount to approximately 38.52 billion won. To address accounting weaknesses ahead of the KOSDAQ listing, the company wiped out the corresponding debt by converting all approximately 3.73 million existing RCPS into common shares in June 2024; however, the deficit already recorded in the past was permanently fixed, meaning the book deficit has not recovered even though the current enterprise value has crashed to the 70 billion won range.

The bigger problem is that, stripping away the accounting illusion, the substantive accumulated operating loss generated purely from the core business reaches a staggering 57.82 billion won. Even as sales dropped to the 1.6 billion won level, selling, general and administrative (SG&A) expenses, which include R&D and labor costs, have remained fixed at an average of over 8 billion won per year (based on the last 5 years), showing that the company still hasn't overcome a structural high-cost constitution where deficits accumulate the more it operates.

Extreme Liquidity Crisis... 'The Penthouse Cheongdam' Collateral and a Down-round with a 70% Drop

Due to the large-scale deficits, self-generated operating cash flow has recorded severe negative figures every year (-5.9 billion won in 2024), and Luxrobo's dependence on short-term borrowings has surged to the 9 billion won level. As self-financing reached its limit, CEO Oh Sang-hoon made the precarious decision to provide his luxury villa, 'The Penthouse Cheongdam (PH129),' registered under his own name, as a real estate collateral joint guarantee with a limit of 7.2 billion won in order to raise funds from the Industrial Bank of Korea (IBK) and others. This apartment was purchased by CEO Oh for about 9.2 billion won out of 10 billion won in proceeds from a past stock sale.

However, as the company was in urgent need of immediate interest repayment (3 billion won IBK loan at a 4.8% interest rate) and survival funds, it recently issued new redeemable convertible preferred shares to external investors, including the IM-SJ Save Us Venture Fund. During this process, the issue price per share was set at 7,500 won, a plunge of about 70% compared to the previous valuation (24,500 won). This clearly indicates a cliff-edge financial situation where the company was driven into a worst-case 'down-round' investment, enduring the bleeding that severely damages existing shareholders' equity value just because it desperately needed a few hundred million won in operating cash.

Pivoting to New Business (EDA Platform), a 'High-Risk' Bet for Survival

As orders in the existing education and Internet of Things (IoT) equipment businesses hit bottom and the sense of crisis over liquidity depletion heightened, the company announced a pivot (change of direction) to a software platform (MODI Factory) business called "AI-based printed circuit board (PCB) design automation solution (EDA)" as a breakthrough. It put forward an innovative goal to reduce the development period to one-tenth and required personnel to one-fifth of current levels by automating PCB design with AI, which previously relied on the manual work of skilled engineers.

However, the market's view of this is filled with concern. This is because it is a market where global big tech companies with massive capital and unrivaled, longstanding technological prowess are competitors. In the midst of a crisis where even extending bank loans is burdensome, relying on CEO Oh's personal real estate collateral due to severe financial distress, market attention is focused on whether Luxrobo can indeed overcome this cliff-edge crisis.