Kakao Mobility takes first step toward 2022 IPO

Kakao Mobility Corp., South Korea's most popular taxi-hailing app, has taken its first step toward a stock market debut, which is expected to value the six-year-old mobility platform at over 6 trillion won ($5.1 billion).

The unit of the country's dominant mobile messaging operator Kakao Corp. has recently sent requests for proposals on its initial public offering to domestic and foreign brokerage companies, according to investment banking sources on Aug. 23.

It plans to appoint lead managers next month for the IPO, which the sources said would likely take place in 2022.

Kakao Mobility has been evolving into a mobility-as-a-service platform for its 28 million registered users as of the end of 2020, about half the country's population. It also boasts 250,000 taxi drivers and 150,000 designated drivers registered on its platform.

Its services range from taxi-hailing, designated driver and navigation to parking reservations. Recently, it acquired Hyundai Capital Services Inc.'s rental car services Dealcar for 8 billion won.

Since being spun off from Kakao Corp. in 2017, the mobility platform has brought over 1 trillion won from external investors, including TPG Capital, The Carlyle Group and Google Inc. After the funding series, Kakao Corp.'s ownership in the unit has declined to 59.03% as of Aug. 6. 

VALUATION, EARNINGS

Its enterprise value has almost trebled to 4 trillion won when it attracted a combined 130 billion won last month in investments from LG Corp., GS Energy Co. and GS Caltex Corp., compared to four years earlier.

Investment banks expect the planned IPO to value Kakao Mobility at over 6 trillion won, reflecting its improving financial conditions and business expansion.

In 2020, the company narrowed its operating losses to 12.9 billion won from 22.1 billion won a year earlier, with revenue more than doubling to 280.1 billion won during the period.

If the IPO goes through, the company will move from the ranks of Kakao units in line for an IPO to join those such as KakaoBank and Kakao Games Corp., which already debuted on the stock market. 

Early this month, KakaoBank became South Korea’s first listed internet-only bank and the country's most valuable lender. Its 2.55 trillion won ($2 billion) offering marked the country's third-largest IPO.

Kakap Pay, the mobile payment app, is preparing for a market listing next month.

Kakao Entertainment Co. and Yanadoo Corp. are other Kakao units expected to line up for IPOs. Yanadoo operates the smart educational service and platform for children, Kakao Kids.

Pre-IPO Investors in Kakao Mobility:

Investor	Investment Amount	When
GS Energy	5 billion won ($4 million)	July 2021
GS Caltex	25 billion won ($22 million)	July 2021
LG Corp.	100 billion won ($88 million)	July 2021
TPG, Carlyle Group	$125 million	June 2021
Google	56.5 billion won ($50 million)	April 2021
Carlyle Group	$200 million	Feb. 2021
Foreign pension funds, Japan's Orix and Korea Investment Partners	150 billion won sold down by TPG	2018
TPG Capital	500 billion won	2017

Write to Jin-seong Kim at jskim1028@hankyung.com
Yeonhee Kim edited this article.