Mubadala, Goldman Sachs to invest $700 mn in Kakao Mobility

United Arab Emirates’ sovereign wealth fund Mubadala Investment Co. and Goldman Sachs are set to invest a combined $700 million in Kakao Mobility Corp., South Korea’s largest taxi-hailing app, to take over shares from its financial investors, including TPG and Carlyle Group, according to investment banking sources on Friday.

Mubadala will pour around $400 million into the mobility platform via a consortium led by Seoul-based private equity firm VIG Partners. VIG aims to secure a stake of between 40% and 49% in Kakao Mobility to control the unit of Kakao Corp., the operator of South Korea’s most widely used messenger app KakaoTalk.

Goldman will make an equity investment of around $300 million in Kakao Mobility via a separate vehicle, said the sources.

Stephanie Hui, global co-head of growth equity at Goldman Sachs Asset Management, was said to have led the investment just as she did for its 10-billion-yen investment in Go Inc., Japan’s biggest taxi booking app, in 2023.

Including proceeds from Goldman, VIG plans to inject between the mid- and upper-2 trillion won ($1.4 billion) range into Kakao Mobility, including about 1 trillion won through acquisition financing.

They are seeking to acquire shares from TPG with a 29% stake in Kakao Mobility, Carlyle Group (6.17%), LG Corp. (2.46%) and Google Inc. (1.52%), as well as a portion of the 57.2% stake held by Kakao Corp., the largest shareholder with a 57.2% stake.

TPG and Carlyle had invested in the mobility app between 2017 and 2021. Goldman and the VIG-led consortium estimate Kakao Mobility's enterprise value at around 6 trillion won.

In addition to the funding from the consortium, VIG will tap its blind pool fund to finance the deal. Korea Development Bank, Shinhan Bank, Woori Bank and Kiwoom Securities Co. will lead the acquisition financing. 

HURDLES REMAIN

While VIG Partners is aiming to close the deal this month, it is facing headwinds as some investors have balked at Kakao Mobility’s estimated valuation of 6 trillion won.

It has also yet to win full support from Kakao Mobility’s existing investors over their exit strategy, while the messenger app operator Kakao has turned down VIG’s management buyout offer.

Some Korean institutional investors, including private equity house KDB Investment, have decided not to participate after reviewing the investment terms, which lack risk protection clauses, said the sources.

In 2024, Kakao Mobility swung to a profit after two consecutive years of losses, posting a net profit of 28.9 billion won, versus a 124.2 billion won shortfall in the year prior.

Its operating profit more than doubled to 93.0 billion won over the same period.

Write to Jun-Ho Cha at chacha@hankyung.com
 


Yeonhee Kim edited this article.