The Swing buys van-hailing service Tada for $19 mn

South Korea's personal mobility platform company The Swing Co. has acquired the management rights of the van-hailing service Tada.

Negotiations between the two companies achieved a breakthrough after Tada's operating company halved the service's valuation.

Investment banking sources on Monday said The Swing, operator of the e-kickboard sharing service Swing, agreed to buy a 60% stake in Tada, which is run by the Seoul-based mobile app and web service provider Value Creators & Co. (VCNC) and owned by domestic fintech unicorn Viva Republica.

Under the deal, Tada's corporate valuation was a reported 40 billion won ($31.6 million), with the acquisition price including the management premium estimated at 24 billion won.

Tada has suffered operating losses over the last three years after the National Assembly in 2020 passed an amendment to the Passenger Transport Service Act. Its losses continued to mount even after the service's sale to Viva Republica in 2021.

Last year’s sales of 4.1 billion won were 7.8% more than 3.8 billion won in the previous year, but operating losses surged 47.9% to 26.2 billion won.

Due to its large deficit and high price, Tada saw no acquisition interest for a time after being placed on the M&A market. In January, Jin Mobility, which runs the cab-hailing service i.M Taxi, agreed to take over but withdrew shortly afterwards, and The Swing was mentioned as a strong potential buyer at the time.

Negotiations on the sale reportedly made major progress after VCNC halved Tada's corporate valuation, which was initially set at 80 billion won. The Swing recently entered the two-wheel motorcycle sector and has shown interest in expanding to the mobility market for four-wheel vehicles.

Founded in 2018, The Swing is a startup with the nation's largest personal mobility service Swing. With about 90,000 electric kickboards, bicycles and scooters, the company has some 2.2 million members.

After the largest shareholder CEO Kim Hyung-san, The Swing has as major stakeholders venture capital specialist Hashed and software company Alticast. Last year, The Swing's operating profit reached 1.6 billion won on sales of 45.6 billion won.

Write to Ji-Eun Ha at hazzys@hankyung.com