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SoftBank-backed Socar, South Korea’s largest car-sharing startup, fails to launch – TechCrunch


Socar, South Korea’s largest car-sharing startup, failed to make its Seoul stock market debut on Monday, even after valuing the stock below the bottom end of the market range.

Shares of Socar rose 1.25% from its IPO price of 28,000 won ($21.10) in the first minutes of its launch, before falling to 26,300 won and bringing the company to a market cap of 642 million. USD.

Last week, Socar slashed its target IPO offering to 102 billion won ($78.1 million), giving the car-sharing company a valuation of 966.5 billion won ($731 million) before it started delivering Translate.

The launch of Socar comes in the context that the IPO market in Korea is in a stagnation stage, causing a series of Korean companies to delay their listing plans.

Analysts attributed Socar’s poor performance on the day of its launch to expensive valuations and a slowdown in the IPO market reeling from the global economic downturn.

Jaeuk Park, CEO of Socar, told TechCrunch earlier that the company is pushing ahead with its listing plan because it is confident in its operating results and is expected to generate both operating and profit margins. net profit at the end of the year.

Instead of waiting for the stock market to recover to a higher valuation in the next 2-3 years, the Korean mobile startup, he said, has invested in organic/inorganic growth first with proceeds from the stock market. IPOs.

“First of all, Socar’s growth rate is faster than expected in the face of reopening [after the COVID-19 pandemic],” said Park. “The stock market is expected to be tough for the time being, but the mobile industry will evolve so quickly that we can’t afford to miss this pivotal moment; We will focus on accelerating mergers and acquisitions as well as investing in new businesses and technologies. “

The company plans to strengthen its services and geographical expansion efforts through acquisitions to become a mobile super app with a target of 1 trillion won ($748 million) in revenue by 2025. up from 289 billion won last year, Park continued. It aims to achieve annual revenue growth of 30% or more by 2025, he added.

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

The 11-year-old company, which started a car-sharing service with 100 rental cars in Jeju, now manages a fleet of more than 19,000 vehicles across the country, providing services, including car sharing, car rental Car rental, electric bicycle rental. , parking, vehicle management and vehicle maintenance. It will launch its transportation 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, a charging station service for electric cars, and micromobility.

Park said in an interview that Socar wants to enter the Southeast Asian market with its fleet management system (FMS) B2B SaaS service and is expected to start selling by the end of the fourth quarter of this year. Socar, based on its 19,000 vehicles, has built in FMS technology that uses data such as vehicle location and surroundings to support an effective monitoring and control system that provides precise information to the driver. vehicle and management server.

“FMS is different from car sharing, Socar’s top business for the past ten years, and if stable, it’s a B2B SaaS that guarantees high margins,” said Park.

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

The Korean ride-hailing company established Socar Malaysia, a 79% stake owned by SK Inc, and launched the service in Malaysia in 2018 and Indonesia in 2020.

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

The company’s main shareholders, including SoftBank, SK Inc, Lotte Rental and Altos Ventures, will hold their shares since they agree to a cut-off period of up to six months.

Socar was founded in 2011 by Lee Jae-woong, the co-founder of Korea’s largest internet portal operator Daum Communications; Daum merged with Kakao in 2014. Jaeuk Park, a serial entrepreneur who founded VCNC, a messaging app for couples called Between, in 2011, sold VCNC to Socar in 2018. After selling VCNC, Park joined Socar’s chief strategy officer (CSO) to lead Socar’s ride-hailing business, Tada, and assumed the position of chief executive officer (CEO) in 2020 after Lee’s resignation.

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

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



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