US, HK public funds join TPG-led group to co-invest $50 mn in Kakao Mobility

Two US state pension funds and a Hong Kong public fund have invested 50 billion won ($47 million) in aggregate to buy a minority stake in South Korea’s top taxi-hailing service provider, Kakao Mobility Corp., in co-investment led by private equity firm TPG.

They participated in a TPG-led consortium which signed an agreement last year to acquire a 30% stake in Kakao Mobility, spun off from the country’s largest mobile messaging app Kakaco Corp., for 500 billion won.

The three unidentified institutional investors completed the purchase of a 3.07% stake in Kakao Mobility on Feb. 13, according to a regulatory filing by Kakao Corp. which owns 69.3% in the spun-off unit after the stake sale.

“The transaction reflects TPG’s investment strategy of encouraging co-investment from LPs, rather than raising a super-sized fund,” said one of investment banking sources on Feb. 20.

In the consortium, Japanese financial services firm Orix Corporation and Korea Investment Partners Co. Ltd. also joined as co-investors and anted up 100 billion won for a 6.02% stake.

TPG invested 350 billion won for a 21.61% stake in the South Korean firm, following an equity investment in US ride-sharing service company Uber.

They bought the shares, including new issues, at 68,027 won apiece.

With assets of 217 billion won at end-September 2017, Kakao Mobility runs the country’s largest cab-hailing app, Kakao Taxi and provides designated driver and navigation services.

It recently acquired a domestic carpool startup for 25.2 billion won.

By Hugh YH Jeong

hugh@hankyung.com

Photo: Getty Images Bank

(Modified on Feb. 28, 2018 to add the ownership ratios and drop the names of institutional investors involved in the deal at the request of the sources.)