SEOUL, August 07 (AJP) - Watcha, a South Korean streaming platform, has entered court receivership after a creditor-initiated petition. Despite the ongoing court proceedings, the company has assured users and partners that its services will continue without disruption.
According to industry sources on Thursday, the Seoul Bankruptcy Court approved the commencement of Watcha’s rehabilitation process on August 4. The decision followed a petition filed by Enlight Ventures, a holder of Watcha’s convertible bonds.
The deadline for Watcha to submit a rehabilitation plan is set for January 7, 2026. The court will then review the proposal to determine whether to approve the restructuring. If the plan is deemed unviable, the company could face bankruptcy. Lists of rehabilitation creditors, secured creditors, and shareholders must be submitted by September 1 this year, followed by rights filings related to claims and securities by September 22.
The court did not appoint an external trustee, allowing Watcha CEO Park Tae-hoon to retain control and continue managing the company under the existing leadership. Watcha stated that it will "respect and comply with the court's decision to initiate rehabilitation proceedings."
In a statement, the company emphasized, "Existing refund and cancellation policies, as outlined in our terms of service, remain unchanged. All services will continue to operate normally without interruption." It added, "We will maintain transparent communication with our users and partners, and share updates as the process moves forward."
Choi Hyo-jong, the attorney representing Watcha, said, "Watcha will diligently follow the court’s schedule throughout the rehabilitation process," and added, "We are also actively exploring M&A opportunities and fundraising efforts."
Founded in 2011, Watcha began as a personalized film recommendation platform and expanded into streaming services in 2016. The company once stood out for its strong curation and user rating features. However, as competition in the local streaming market intensified, Watcha struggled to retain users.
According to IGAWorks’ Mobile Index, Watcha’s monthly active users (MAU) dropped from an estimated 1.29 million in January 2022 to just 460,000 as of last month.
The company's 2024 audit report painted a grim picture: revenue fell to 33.8 billion won (about $24 million), down 22.83 percent from the previous year’s 43.8 billion won. Operating losses totaled 1.84 billion won (about $1.3 million), while net losses reached 8.29 billion won (about $5.9 million). Notably, its current liabilities exceeded current assets by 90.7 billion won.
Watcha had raised 49 billion won (about $35 million) in CB investments from major venture capital firms and individual investors in 2021. However, it failed to repay the principal and interest by the maturity date in November 2023, and no extension agreement was reached. As a result, Shinhan Accounting Corporation, the company’s auditor, issued a disclaimer of opinion, citing “substantial doubt about Watcha’s ability to continue as a going concern.”
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