Affirma hits first close on Korea fund, backs SK mapping spinout

The fund, Ascenta V, is aiming for a final close of KRW700 billion by October, having increased the target size from KRW500 billion in response to strong investor demand. The first close includes commitments from 14 LPs, among them Korean sovereign wealth funds and major domestic banks.

The new vehicle is already more than twice the size of its predecessor, which closed at KRW256 billion in 2016. The mandate is also broader. In addition to deploying capital in Korea, Ascenta V will pursue deals in China, India, and Southeast Asia.

“We continue to focus on mid-market growth and buyouts with an added focus on ESG and global expansion, a mandate which has differentiated Affirma Capital over decades. We also plan to introduce unique Asian investment opportunities to Korean and global LPs by originating with Affirma Capital's global team,” Taeyub Kim, a founding partner and the firm’s head of Korea, said in a statement.

T Map Mobility will be the first investment from the new fund. The funding round also features Uber and domestic GP East Bridge. Earlier this year, it was announced that SK Telecom would establish a taxi e-hailing joint venture with Uber. The global ride-hailing giant agreed to invest more than $100 million in the JV and around $50 million in T Map.

The business is Korea’s dominant map-navigation service provider, offering a combination of an extensive map database and a routing algorithm. It is used by more than 75% of the country’s car drivers and claims 13.2 million monthly active users (MAUs). Customers include designated driver, taxi, and courier companies. T Map wants to expand and monetize its user base across B2B and B2C segments.

Affirma said in a separate statement that it would help T Map grow its B2B businesses using database analytics and develop various mobility-related service products. Entering Southeast Asia is another strategic priority.

SK Telecom, a unit of domestic conglomerate SK Group, has interests spanning high-speed internet services and mobile virtual network calling, audio equipment and music streaming, digital advertising, e-commerce and online-to-offline services, cryptocurrency solutions, and security. T Map was set up in 2002 and restructured as an independent entity at the end of last year.

Navigation represents a natural expansion strategy for SK Telecom, given the parent’s 5G technology and artificial intelligence capabilities. There were also synergies with ADT Caps, a security monitoring and dispatch business acquired from The Carlyle Group in 2018. T Map and ADT developed a parking lot information service, combining the former’s platform with the latter’s parking lot management unit.

SK Telecom generated KRW18.6 billion in revenue last year, up from KRW17.7 billion in 2019. The company has not disclosed any financial performance data for its mobility business. More than 60% of revenue comes from mobile network services.

T Map’s main competitor is Kakao T, formerly known as Kakao Mobility. The company started out as a taxi-hailing service, but has since expanded into various other areas, among them navigation through Kakao T Navi. Kakao T was spun out from its parent in 2017 and has raised third-party capital from the likes of TPG Capital, Carlyle, and Google.

Affirma’s Korea’s funds were previously raised under the Standard Chartered Private Equity (SCPE) Korea name. It raised KRW246 billion across the first two in 2011 and closed a third of KRW290 billion two years later.

The bank’s PE team agreed to spin out in late 2018, taking most of SCPE’s remaining $1 billion in assets off the balance sheet. The transaction was supported by ICG Strategic Equity, a unit of Intermediate Capital Group. Affirma was allocated $700 million for new investments.

The GP has $3.5 billion in assets under management across Southeast Asia, India, China, South Korea, the Middle East, and Africa. The total includes assets spun out through five secondary deals between 2013 and 2015, as well as separate account mandates.

T Map will be Affirma’s third post-spinout investment in Korea, following Sunwoo Fresh, an integrated meat processor and distributor, and APR, an e-commerce company. Last year, the firm completed the turnaround of EMC Holdings, a wastewater management business it first backed in 2009, through a KRW1 trillion sale to another SK Group subsidiary. Affirma generated a 14.2x multiple and a 26% IRR.

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• Topics
• North Asia
• Fundraising
• Expansion
• Growth
• Technology
• South Korea
• Affirma Capital
• Transportation
• Growth capital
• TMT