Korea's two ride hailing apps to merge in H1, become top operator

South Korea’s ride hailing apps TADA and i.M are set to complete their merger as early as the first half of this year, aiming to become the country's largest van service platform.

Viva Republica, the largest shareholder of TADA’s operator VCNC and the operator of banking app Toss, is in talks with Jin Mobility Corp., i.M’s service operator, to set up a new entity to firm up the deal, according to investment banking sources on Monday.  

The hailing app operators have been considering the deal since early this year. 

Once the merger is completed, the new entity is slated to receive 100 billion won ($75.9 million) from local private equity firm Oceanfront Partners to expand its business.

Jin Mobility will become the new entity's largest shareholder, followed by Oceanfront and VCNC. The two ride-hailing service operators are considering integrating their platforms.

The new entity will become the top ride-hailing service operator by fleet size, running 1,700 large vans, compared with its nearest rival Kakao Mobility’s 1,000. The gap is expected to further widen following Oceanfront’s investment.

The merger is expected to lead to more frequent van dispatches, reducing waiting times to five minutes in Gyeonggi Province surrounding Seoul, a source said.

Through the deal, van service operators will save on vehicle maintenance and insurance expenses, as well as app operating costs.

TADA has ramped up its business expansion through large-van operating service TADA. Jin Mobility increased its corporate value by acquiring local taxi companies.

Meanwhle, the Seoul-based investment firm Oceanfront was founded last year by Patrick Song. After earning an MBA at Columbia University, he built his finance career at Deutsche Bank and Lehman Brothers. Song also served as Seoul office head of Hong Kong-based buyout firm Unitas Capital and chief executive at Korea’s Daol Private Equity.

Write to Dong-Hun Lee at leedh@hankyung.com
Jihyun Kim edited this article.