PE-backed Korean ride-sharing player Socar drops on debut

The company sold 3.64m shares for KRW 28,000 apiece, according to a prospectus, for a market capitalisation of KRW 916.3bn. It was a cut-back offering, with Socar having originally planned to sell 4.6m shares on a scale of KRW 34,000-KRW 45,000. The stock ended August 22 on KRW 26,300, which represents a 6.1% discount to the IPO price.

Established in 2011, Socar raised KRW 562.9bn in private funding. Bain Capital Ventures was the first investor, leading a KRW 17.5bn Series A round in 2014 and re-upping a KRW 64.3bn round led by SK Holdings in 2015. Over the next seven years, IMM Private Equity, Altos Ventures, Stonebridge Capital, SoftBank, LB Private Equity, SG Private Equity, and Lotte Rental joined the shareholder register.

Notably, IMM made a solo investment of KRW 60bn in 2018 and Lotte committed KRW 183.2bn in March of this year. Lotte picked up a 13.9% stake, becoming the third-largest shareholder. The round gave Socar a post-money valuation of KRW 1.3trn and reportedly made it Korea’s 12th unicorn.

The company started out with 100 vehicles on Jeju Island and launched its mobile app in 2012. It was in six major cities by 2014 and had reached 54 by 2015. Expansion came in part through M&A, including the acquisition of messaging and social networking business VCNC, which Socar claims helped it become a platform service company.

In 2018, VCNC launched Tada, a controversial service that dodged the ban on private cars being used for ride-hailing by offering vans instead. The government stepped in with a legislative amendment in 2020, forcing Tada to work with rather than against taxi drivers. A year later, VCNC’s messaging business was sold to game developer Krafton, while payments app operator Toss acquired Tada.

Jae-uk Park, who founded VCNC and stayed on after the acquisition by Socar, became CEO of Socar around the same time. His promotion was prompted by Jae-woong Lee, Socar’s founder and before that a co-founder of Daum Communications, stepping back.

The Socar offering now comprises assorted car-sharing services – from rentals of varying duration to intermediated rentals for third-party providers – that account for around 98% of revenue. The company also has business units for electric bike-sharing, parking lot search and payment, car washing, fleet management systems, and autonomous driving software.

The car-sharing fleet amounted to more than 15,000 vehicles located in 4,100 dedicated Socar zones at the end of 2021. During the year, users spent a cumulative 44,633,716 hours in the company’s vehicles.

Revenue reached KRW 289bn in 2021, up from KRW 220.6bn the previous year, while the company swung from a net loss of KRW 67.4bn to a net profit of KRW 6.3bn. In the first six months of 2022, Socar posted revenue of KRW 159.1bn and a net loss of KRW 18.8bn.

Socar’s trading debut came days after Kakao decided against a partial divestment of its mobility unit, which offers some of the same services. Kakao was considering an investment by MBK Partners that would have facilitated exits for The Carlyle Group and a TPG Capital-led consortium.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• IPO
• Technology
• South Korea
• automobiles
• TMT
• Bain Capital Asia
• IMM Private Equity
• Stonebridge Capital
• SoftBank Ventures Asia
• Altos Ventures