Toss’ TADA sale back to square one; its mobility push faces setback

Viva Republica Inc., South Korea’s fintech unicorn operating mobile financial platform Toss, is at a crossroads as its second attempt to sell TADA has fallen through, and its bid to turn the financial service platform into a super app has hit stumbling blocks.

According to the investment banking industry on Tuesday, Viva Republica has recently notified The Swing Co. of its decision not to sell its 60% stake in VCNC, the operator of TADA, a Seoul-based van-hailing service.

The two parties were in the final stages of completing the deal, in which the Korean personal mobility platform company was seeking to buy the largest stake in the van-hailing service operator at 24 billion won ($18.2 million).

The seller was said to scrap the deal just before it was about to sign a share purchase agreement with the candidate, according to sources.

It was speculated that Viva Republica was not happy with The Swing’s offer price, which put VCNC’s valuation at 40 billion won.

The Toss operator initially asked for up to 100 billion won in TADA’s valuation when it negotiated with Jin Mobility Corp. earlier this year to merge its van-hailing taxi service with the latter’s premium taxi service i.M.

Their marriage attempt collapsed at the last minute.

“We were not convinced whether The Swing would be the best suitor,” said an official of Toss. “As VCNC’s profitability has improved somewhat thanks to its restructuring and self-rescue efforts, we will find more effective measures to manage the company.”

With Viva Republica’s attempts to dispose of TADA back to square one, all eyes are on the Korean fintech unicorn’s next move.

AT A CROSSROADS

It has been seeking to groom its payment service app Toss into a super app providing full-fledged financial services from banking to securities to advance into overseas markets.

It pinned high hopes on TADA for its role in its super app plan.

Expectations were also high that the Korean fintech unicorn’s acquisition of the van-hailing service touted as a symbol of innovation would create great synergy when it took over the majority stake in VCNC in October 2021.

Viva Republica expected TADA customers would become customers of Toss’ payment and banking services, a move that was expected to accelerate its push to achieve economies of scale as a super app such as Grab or Gojek.

Both Southeast Asian super apps started as ride-hailing platform companies but later added their own payment services GrabPay and GoPay to their mobility services, becoming the region’s leading super apps.

But the integration between Toss and TADA has been slowed mainly due to multiple obstacles in the Korean mobility market.

While Kakao Mobility Corp. commands nearly 90% of the country’s ride-hailing taxi platform market, the van-hailing service market has remained stagnant partly due to the country’s strict regulations on the mobility platform sector.

Without relaxation in the country’s mobility platform regulations, the outlook of Viva Republica’s super app vision with TADA looks dim.  

One last hope is TADA’s reattempt to merge with i.M.

As i.M needs to attract more investors to keep it afloat, the two van-hailing services could seek a breakthrough with a merger again, industry observers expected.

BIGGER TOLL ON THE SWING

But The Swing is the one that would suffer the most collateral damage from Viva Republica’s sudden withdrawal from the deal.

The e-scooter sharing platform company last month formed a task force with TADA staff to come up with an integration plan after their merger.

It is known that it has already developed TADA’s hailing service to add it to the Swing App.

Due to the unexpected deal collapse, The Swing’s efforts to raise funds for the acquisition have stopped.

Its big plan to take a leap as a multi-mobility service app covering e-scooters, other two-wheelers and van taxis has also come to a halt.

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


Sookyung Seo edited this article.