Formation 8 leads round for Korea's Yello Mobile

The investment is structured as a convertible debt and is expected to value Yello Mobile at around $4 billion. The round has yet to close and further commitments are likely to come over the coming months.

Formation 8 invested $100 million in Yello Mobile last year at a valuation of more than $1 billion. The company, which was founded in 2012, operates a range of mobile platforms, apps and services across e-commerce, digital entertainment, online marketing, data analytics, and online-to-offline (O2O) services.

Through a combination of organic and inorganic expansion, Yello Mobile has become the dominant players in its five verticals in Korea, with a combined user base of more than 18 million monthly active users. Assets include Coocha, the leading domestic shopping search app, and Pikicast, a digital media content platform. Coocha delivered positive EBTIDA in the quarter ended September, while Pikicast is expected to achieve profitability early in 2016.

Yello Mobile has also pushed aggressively into Southeast Asia, completing a string of acquisitions. Brian Koo, a partner at Formation 8, previously told AVCJ that the company recognized similarities between Korea and Southeast Asia in how mobile phones are central to people's lifestyles, but the infrastructure is a couple of years behind.

"There might be a company with all the shopping data in Indonesia but no algorithm, and consumers can't interact with the mobile service because the infrastructure isn't there," he said. "If Yello Mobile can acquire this company and build a local operation then it will be in a strong position when the growth happens."

In a statement released following the most recent funding, Koo said he was particularly excited about the company's expansion across Asia.

The investment comes several weeks after Formation 8 announced that it would not raise a third fund with the three founders deciding to go their separate ways. Koo has launched a new firm called Formation Group, which is said to be raising $400 million for investments in Asia-focused companies. Koo wants the portfolio to be smaller than for the average VC fund with a view to accelerating growth through deep operational involvement.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Expansion
• Venture
• North Asia
• Southeast Asia
• Technology
• Consumer
• TMT
• Consumer
• Venture
• Growth capital
• Formation 8
• Southeast Asia
• South Korea