Formation 8 backs Yello Mobile's O2O unit

The company said in a filing that the Formation Group Fund I would take a 29.22% interest in the business. The fund closed at $357 million in February.

Koo first backed Yello Mobile while at Formation 8, participating in a $100 million round of funding for Yello Mobile in 2014 at a valuation of $1 billion. It re-upped last year – at a valuation of around $4 billion – by leading a $47.2 million investment structured as convertible debt. This was part of a broader funding round that also involved the likes of Japanese internet finance group SBI Holdings.

Formation Group sees itself as “going beyond venture capital” by establishing a company-building platform. To this end, it is targeting a concentrated number of early and growth-stage companies with global ambitions and seeks to play a hands-on role in their development. This approach was in part modeled on Koo’s previous work with Yello Mobile.

The Korean company has five core verticals: e-commerce, digital entertainment, online marketing, data analytics, and O2O services. It has carved out a dominant position in these areas within domestically and wants to do the same in Southeast Asia, making numerous bolt-on acquisitions to this end.

Formation Group’s O2O services investment is part of a wider effort by Yello Mobile to raise capital for its subsidiaries. Last year, its digital marketing unit, Yello Digital Marketing, received $15 million from Partners For Growth (PFG), the PE arm of SVB Financial Group.

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• Topics
• North Asia
• Expansion
• Technology
• Consumer
• South Korea
• Formation Group
• TMT