Korea's Kakao abandons plans for mobility unit stake sale
South Korean internet giant Kakao has abandoned plans to partially divest Kakao Mobility, its transportation division.
Kakao announced last month that it was considering the sale of an approximately 10% interest in the business. Responding to a local media report that MBK Partners had offered to buy shares from Kakao, a TPG Capital-led consortium, and The Carlyle Group in a deal worth KRW 8.5bn (USD 6.5bn), Kakao said in a filing that it had decided against proceeding with the divestment.
The transaction being contemplated would have primarily facilitated exits for existing private equity investors. Kakao currently owns 57.5% of Kakao Mobility. For the company to be relegated to second-largest shareholder – a stated outcome – the incoming investor would have to take out the bulk of the TPG and Carlyle holdings of 29% and 6.2%, respectively.
TPG has been invested in the company ever since the separation from Kakao. It headed a consortium that contributed KRW 500bn in July 2017, valuing Kakao Mobility at KRW 1.6trn. Carlyle put in USD 200m in February of last year. A planned Kakao Mobility IPO was put on hold in August 2021.
The company was most recently valued at KRW 5.5trn when GS Retail invested KRW 65bn in December 2021, taking overall funding to about KRW 1.11trn. Kakao Mobility then bought parking facility management business GS Park24 – another GS Group affiliate – for the same amount.
Kakao, the product of a 2014 merger between mobile messaging provider Kakao and web portal Daum Communications, has brought private equity and strategic investors into several of its subsidiaries. TPG and Anchor Equity Partners have exposure to KakaoBank, while Anchor also holds a stake in entertainment division Kakao M.
Launched in 2015, Kakao Mobility claims to be Kore’s largest mobility-as-a-service (MaaS) platform with 31m registered users and a fleet of 37,000 vehicles. It started out as a taxi-hailing service and expanded into areas such as designated driver services, electric bicycle rental, shuttle bus services, and air, rail, and intercity bus ticket booking.
The Kakao T mobile app provides a single point of access. It also leverages real-time information sourced through the Kakao Mobility network to predict traffic volumes, offer navigation and route-planning services, and track parking lot vacancies.
According to Kakao, the mobility business turned profitable in the 2021 financial year. It is part of the new platform division – alongside payments and enterprise services – which generated about KRW 1trn in revenue in 2021. Kakao’s overall revenue for the year was KRW 6.12trn.
More on North Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.