Affirma invests $100m in Korea cloud services provider

It claims this is the first direct investment by a PE firm in a Korean cloud MSP and the single largest commitment executed by a financial sponsor in the country's broader cloud computing industry.

Metanet T Platform is a subsidiary of Metanet Group, a business services player that provides consulting, digital, technology solutions, and operations services. The parent is best known for Metanet Global, Accenture's partner in Korea.

Metanet T Platform collaborates with Metanet Group's 12 affiliates, but the spin-out and raising of third-party capital reflect the size of the broader cloud services opportunity. The proceeds will support a $174 million investment over the next three years in platform-as-a-service (PaaS) and software-as-a-service (SaaS), as well as overseas expansion. An IPO has been penciled in for 2023.

The company delivers hybrid cloud services, driven by on-premise operations and management experience as well as public cloud expertise. Its offering covers the entire cloud value chain, from consulting to infrastructure, data, application modernization and security. The customer base spans financial services, manufacturing, e-commerce, retail, and media. It is NH Bank's public cloud MSP.

Affirma noted that demand for digital transformation triggered by COVID-19 has proved a boon for specialists capable of managing migration to the cloud. Business opportunities for Metanet T Platform are expected to come from within the Affirma portfolio through tie-ups with the likes of India-based IT solutions player Prodapt Solutions and Vietnamese payments company MoMo.

"Affirma Capital will contribute to value-add initiatives of the company through collaborations with those portfolio companies and moreover, we will actively support M&A strategies for overseas expansion of MTP," said Taeyub Kim, the firm's head of Korea, in a statement.

Affirma achieved a first close of KRW443 billion ($403 million) on its fifth Korea fund in April. The overall target has been increased from KRW500 billion to KRW700 billion. The vehicle is larger than its predecessor but also has a broader mandate, pursuing deals in China, India, and Southeast Asia, as well as in Korea.

Previous Korea funds were raised under the Standard Chartered Private Equity (SCPE) Korea name.

The first investment – in SK Telecom's mobility business – coincided with the first close. The second was announced less than three weeks ago. Affirma acquired a majority stake in two steel manufacturing subsidiaries of Korea-based industrial conglomerate SeAH Group for $76.9 million.

Other recent activity outside of Korea includes a proposed privatization of Golden Throat Holdings, a Hong Kong-listed drugmaker, at a valuation of HK$2.1 billion ($266 million). Working in conjunction with the company founder, Affirma is willing to pay HK$2.80 per share, a 55.6% premium to the previous close. Golden Throat's flagship product is a line of throat lozenges.

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• Topics
• North Asia
• Expansion
• Technology
• South Korea
• Affirma Capital
• Growth capital
• cloud computing