Korea delivery platform Barogo gets $72m Series C
Korean delivery platform Barogo has raised KRW80 billion ($72 million) in Series C funding featuring several local private equity investors, including LB Investment and STIC Ventures.
Korea Investment Partners, Premier Partners, YG Investment, and Shinhan Venture Investment also participated. It follows a KRW12 billion Series B in 2019 that brought together Shinhan, Korea Technology Finance, Timefolio Asset Management, and Timewise Investment.
The key to the latest round, however, is in its strategic support from local conglomerates. CJ Group, which has interests in food, home shopping and logistics, has lifted its total exposure to Barogo to KRW10.5 billion. Meanwhile, SK Group invested KRW25 billion via 11Street, an e-commerce property of SK Telecom. They will support the establishment of 25 fulfilment centers primarily around Seoul.
Additional growth plans include the hiring of 100 new staff to develop new business lines, including new delivery-related services. The company announced earlier this week that it would hire 50 new people in the IT division alone. Expansion efforts will encompass the food and non-food segments, as well as a shift from two-wheeler to four-wheeler vehicle service.
Barogo operates an on-demand B2B logistics management model that also includes a consumer-facing interface for placing orders in real-time for a wide range of consumer basics. The platform is best known for food, with clients including the likes of McDonald’s, Burger King, and Dunkin Donuts. Transaction volume is said to have jumped 166% last year to almost KRW3 trillion due to pandemic-related demand.
Competition includes Woowa Brothers, operator of the Baedal Minjok platform, which is the subject of a $4 billion acquisition by Germany’s Delivery Hero. Local e-commerce player Coupang is also active in this space via its Coupang Eats service. Coupang raised a $4.5 billion IPO in March.
Delivery Hero is also active in Korea via its Yogiyo app, which must be divested as part of the Woowa deal. Yogiyo provided Barogo’s KRW20 billion Series A in 2018 after acquiring Foodfly, a competitor previously backed by Timewise among other local VCs. Woowa and Yogiyo were estimated to have a combined 90% market share in the food delivery space last year.
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