SoftBank-backed Socar, South Korea’s biggest car-sharing startup, tumbles in market debut – TechCrunch

Socar, South Korea’s largest car-sharing startup, also fell after pricing shares at the lower end of the market range in its Seoul stock market debut on Monday.

Socar’s shares rose 1.25% from an IPO price of 28,000 won ($21.10) in the opening minutes of the debut, before falling to 26,300 won, giving the firm a market cap of $642 million.

Last week, Socar cut its target IPO offer to 102 billion won ($78.1 million), giving the car-sharing company a valuation of 966.5 billion won ($731 million) before trading began.

Socar’s debut comes amid a sluggish period in South Korea’s IPO market that has prompted a string of Korean companies to delay their listing plans.

Analysts attributed Socar’s muted performance on its debut day to expensive valuations and a slowdown in the IPO market, which is reeling from the global economic slowdown.

Socar CEO Jaeuk Park previously told TechCrunch that the company advanced its listing plans because it was confident in its performance and expected to generate both operating profit and net profit by the end of this year.

Instead of waiting for a higher stock market valuation for the next two to three years, the Korean mobility startup has prioritized investing in the organic/inorganic growth from its IPO, he said.

“First of all, Socar’s growth is faster than expected during the reopening [after the COVID-19 pandemic]”Park said. “The stock market is expected to be difficult for now, but the mobility industry will grow rapidly so we cannot afford to miss this critical time; We will focus on mergers and acquisitions and increasing investment in new businesses and technologies.”

The company plans to expand its services and geographic expansion efforts through acquisitions to become a mobility super-app with a goal of posting 1 trillion won ($748 million) in revenue by 2025, up from 289 billion won last year, Park continued. . He said that by 2025, the target is to increase the revenue by 30 percent or more annually.

Socar, the first and only unicorn mobility startup in South Korea, aims to become the first listed profitable unicorn company, Park noted.

Backed by Socar, SoftBank and Korean strategic investor SK Inc, South Korea’s rental car unit entered the unicorn club in March with about 183.2 billion won ($150 million) in funding of 1.3 trillion won (about $1 billion) from Lotte Rental. Lotte Group. The startup raised a total of 379.7 billion won ($284.2 million) since its founding in 2011 before its IPO.

The company’s major shareholders, including SoftBank, SK Inc, Lotte Rental and Altos Ventures, will retain their shares after agreeing to a lock-up period of up to six months.

The 11-year-old firm, which started its car sharing service with 100 rental cars in Jeju, now manages a fleet of more than 19,000 vehicles across the country, offering services such as car sharing, car hailing, electric bicycle rental, and more. , parking, vehicle management and vehicle maintenance. It will launch its transport super-app later this year, offering all-in-one mobility services. In addition, Socar is building an ecosystem for future mobility, including an autonomous driving platform, charging station service for electric cars and micro-mobility.

Park said in an interview that Socar wants to enter the Southeast Asia market with its new business, a fleet management system (FMS) B2B SaaS service that it plans to start selling later in the fourth quarter of this year. Socar, based on its 19,000 vehicles, has developed FMS technology that uses data such as vehicle location and surroundings to provide accurate information to drivers and management servers, to support effective monitoring and control systems.

“FMS is different from car-sharing, which has been the core business of soccer for the past ten years, and if stabilized, it is a B2B breath that guarantees a high-profit ratio,” Park said.

Socar claims that the company has captured nearly 80% market share in South Korea this year with over 11.4 million users and 1.4 million monthly active users.

Korean car-hailing company Socar Malaysia, owned by SK Inc., has launched services in Malaysia in 2018 and Indonesia in 2020.

Socar was founded in 2011 by Lee Jae-woong, co-founder of Daum Communications, South Korea’s largest Internet portal operator; Daum merged with Kakao in 2014. Jaeuk Park, a serial entrepreneur who founded VCNC, an operator messaging app for couples called Between in 2011, sold VCNC to Socar in 2018. After the sale of VCNC, Park took over as Socar’s chief strategy officer (CSO) to lead Socar’s ride-hailing business TADA and as chief executive officer (CEO) in 2020 after Lee stepped down.

Korean game maker Crafton acquired VCNC’s messaging app unit in May 2021, while Korean financial super app Toss operator Viva Republica bought a 60% stake in VCNC’s ride-hailing business, Tada, for an undisclosed sum in October last year.

Meanwhile, South Korea’s TMap Mobility, whose investors include Uber Technologies and SK Inc’s investment firm SK Square, said on Monday it had raised $149.2 million (200 billion won) from strategic investor KB Bank. Another Korean car-hailing platform, Kakao Mobility, which had planned an IPO between 2022 and 2023, last week said it ended sale talks with Korean private equity firm MBK Partners.

Leave a Comment

Your email address will not be published.