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Mobility

SK's car-sharing service SoCar Malaysia sees valuation top $210 mn

SK eyes Southeast Asia as the growth hub for its mobility services

By Sep 16, 2021 (Gmt+09:00)

SK's car-sharing service SoCar Malaysia sees valuation top 0 mn

Car-sharing platform SoCar Mobility Malaysia has raised around 65 billion won ($55.6 million) from South Korean private equity firm EastBridge Partners and Sime Darby, a Malaysian trading conglomerate. In the latest funding round, SoCar Malaysia has fetched a valuation of around 250 billion won ($214 million), according to SK Inc. on Sept. 16.

SoCar Malaysia was established in 2017 as a joint venture between SK and SoCar -- noted as the first Korean car-sharing business to venture abroad. Since January 2018, the company has been providing car-sharing services in Mayalsia. Last year, SK acquired additional shares in SoCar, becoming its biggest shareholder.

SK has carried out a strong localization strategy in Malaysia such as hiring local experts as executives, broadening its services to major cities such as Kuala Lumpur and increasing the number of cars to double that of its competitors.

Due to such efforts, the company was able to grow SoCar Malaysia as the region’s leading car-sharing platform just two years after its launch, accounting for a 90% market share with over 1 million users. 

Malaysia is highly regarded as a market with strong potential demand for car-sharing services given the weak public transportation infrastructure compared to its high population density. The car-sharing industry in Malaysia has been logging nearly a twofold growth annually since 2017 with around 7,000 cars in operation.

Following its foray into Malaysia, the car-sharing platform also tapped into Indonesia in December 2020, securing around 100,000 users in just six months.

Indonesia is one of the largest markets in Southeast Asia with a population of around 300 million. Its annual average gross domestic product (GDP) growth rate stands at around 5%, viewed to have endless growth potential in the mobility sector. 

In the recent funding round, investors also took note of Trevo, a peer-to-peer car-sharing startup launched by SoCar Malaysia in 2020, due to its high growth potential as it mainly targets Southeast Asia.

SK's car-sharing service SoCar Malaysia sees valuation top 0 mn

ZONING IN ON MOBILITY

SK has been focusing on the fast-growing mobility industry. Since investing around 100 billion won in SoCar in 2015, SK also went on to invest in other global car-sharing and mobility services such as Grab, Turo and Otonomo. Recently, the companies that SK has invested in have been pushing for an initial public offering, fueling anticipation for high returns.

In 2018, SK Group invested about 250 billion won in the ride-hailing service Grab, which received a valuation of around $39.6 billion – the highest figure ever among Special Purpose Acquisition Company (SPAC) listed firms. Once the company gets listed on the Nasdaq in the fourth quarter, SK’s shareholding value in Grab is expected to increase by about 2.5 times.

Also, SK invested around 40 billion won in a peer-to-peer car-sharing platform Turo in 2017. Last year, Turo received an enterprise value ranging in the trillion won range and recently it has been logging high revenue growth, making it likely for the company to fetch high valuation upon going public.

Moreover, electric vehicle manufacturer Polestar, which SK invested 70 billion won in via New Mobility Fund in April, is eyeing a SPAC listing as well.

Write to Chae-yeon Kim at why29@hankyung.com

Danbee Lee edited this article.

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