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Future mobility

Lotte Rental invests over $20 mn in autonomous driving startup ahead of IPO

Lotte Rental plans to boost its competitiveness in the mobility platform segment via partnership with 42dot

By Aug 09, 2021 (Gmt+09:00)

Lotte Rental invests over  mn in autonomous driving startup ahead of IPO

South Korea's largest car rental and auto leasing company Lotte Rental Co. is set to invest 25 billion won ($21.8 million) in a domestic autonomous driving startup 42dot in a move to boost its competitiveness in the future mobility segment, the company announced on Aug. 9.

Following the investment, Lotte Rental will apply the startup's autonomous driving technology to its rental car business and the car-sharing unit, GreenCar.

In the second half of this year, Lotte Rental and 42dot will begin autonomous vehicle trials in Jeju Island. Next year, the two companies will establish a comprehensive mobility platform, including the launch of an electric vehicle car-sharing sub-brand and a cargo platform that uses autonomous driving technology and EVs.

Founded in 2019, 42dot develops technologies for Level 4 autonomous vehicles. The startup, which has been noted for its superior technologies, is currently in the works to roll out autonomous shuttles, robot taxis and demand-responsive transport (DRT) services in Sejong Smart City, industrial complex Pangyo and Sangam-dong, western Seoul. 

Lotte Rental's investment into 42dot comes a week before its trading debut on Kospi on Aug. 19. The company is looking to raise around 850.9 billion won ($743.3 million) via the IPO, which is expected to generate hefty returns for its financial investors, including the National Pension Service (NPS).

Last week, Lotte Rental's bookbuilding attracted 762 institutional investors with its shares oversubscribed by 217.6 times. The company has fixed its IPO price band between 47,000 won and 59,000 won, based on its estimated enterprise value of 2.8 trillion won.

Following the IPO, Lotte Rental plans to use some of the proceeds for its mobility business, considered to be the company's future growth driver. Earlier in April, Lotte Rental and LG Energy Solution Ltd. entered an agreement to foster EV-based mobility and battery businesses.

Write to Jin-sung Kim and Chae-yeon Kim at jskim1028@hankyung.com

Danbee Lee edited this article.

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