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Goldman, GIC, Sequoia to exit from Korean food delivery app in $4 bn deal

Dec 14, 2019 (Gmt+09:00)

Goldman Sachs, Singapore’s GIC and Sequoia Capital are among the financial investors set to secure handsome returns from a combined 506 billion won ($432 million) investment in South Korea’s top food delivery app operator Woowa Brothers, in which Germany’s Delivery Hero agreed to buy an 87% stake.

Under the agreement signed on Dec. 13, the German online food delivery group valued Woowa at $4 billion, more than 30% from the $3 billion valuation set by GIC, Sequoia and China’s Hillhouse Capital in 2018 when they invested $320 million in the start-up.

In aggregate, Woowa had raised 506 billion won ($432 million) from financial investors since 2014, including 40 billion won from Goldman Sachs in 2014.

Other financial investors include US-based Altos Ventures and Korean venture capital firms KTB Network Co. Ltd. and BonAngels.

Details of their shareholding and the proceeds have yet to be disclosed.

But their proceeds from the deal are estimated to set a record for a Korean start-up investment, according to industry sources.

Woowa’s online app Baeal Minjok controls over half the country’s online food delivery orders, trailed by two rivals owned by Delivery Hero and Softbank-backed Coupang.

The remaining 13% stake owned by Woowa founder Bong Jin Kim and its senior managers will be converted into shares in Delivery Hero, according to the German company.

Kim will become the single largest shareholder in Delivery Hero, but they declined to specify his holding.


The $4 billion valuation brought Woowa, founded in 2010, on a par with large Korean companies such as Hyundai Engineering & Construction Co. Ltd. and GS Corp listed on the Korea Stock Exchange.

Advisory fees on the deal are estimated at between 40 billion won and 50 billion won ($34 million-$43 million), or 1% of the transaction value.

Global banks and top Korean law firms were involved in the transaction.

JPMorgan advised Woowa founder and CEO Kim; Goldman Sachs for itself and Altos Capital; and Morgan Stanley for Delivery Hero.

Korean law firm Kim & Chang worked for CEO Kim on the stake sale and antitrust issues. Yulchon LLC worked for financial investors.

Delivery Hero hired Sullivan & Cromwell LLP and Bae, Kim & Lee for legal services.

PwC worked for both the selling and buying sides.

The investment banks and law firms could provide another advisory services from both Delivery Hero and Woowa on their planned establishment of a 50:50 joint venture for Asian businesses in 11 countries.

“This acquisition case confirmed that there is M&A need for domestic companies from global investors,” said a Korean investment banking source.

“Given the cases of Yahoo Japan’s acquisition of Naver’s Line and Delivery Hero’s purchase of Woowa Brothers, online platform operators are likely to lead the M&A market for the time being.”

By Sang Eun Lee and Dong-hun Lee

Yeonhee Kim edited this article

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