KTB Network wins jackpot from Korean delivery app sale

KTB Network Co., a South Korean venture capital firm, has pocketed a double-digit return, or 62.5 billion won ($55 million) from the sale of its stake in Woowa Brothers Corp., the country's largest delivery service firm, of which Germany's Delivery Hero SE had agreed to acquire an 87% stake for $4 billion.

The proceeds represent 27 times its original investment of 2.3 billion won in the Korean startup, in which Goldman Sachs had poured 40 billion won. On Mar. 30, KTB Network announced the divestment.

The payment from Delivery Hero was split to 20 billion won in cash for 53% of KTB's shareholding and 298,692 shares in Delivery Hero for the remainder. KTB sold the Delivery Hero shares in the stock market for 42.5 billion won.

Since 2014, a group of financial investors had put in a combined 506 billion won into Woowa Brothers, the operator of Baedal Minjok, the country's No. 1 food delivery app. Among them are included Singapore’s GIC, Sequoia Capital, Altos Ventures, China’s Hillhouse Capital and Seoul-based BonAngels. Details about their ownership were not disclosed. 

Under the 2019 acquisition agreement, the German company was supposed to issue 40.1 million new shares of itself and 1.7 billion euros in cash to the existing financial investors and the Woowa management, including Woowa founder and Chief Executive Kim Bong-jin. 

The price tag of $4 billion for the majority of Woowa Brothers is more than 30% higher than the $3 billion valuation estimated by GIC, Sequoia and Hillhouse Capital when they invested in 2018.

Last December, South Korea's antitrust body issued conditional approval of the merger deal, under which Delivery Hero SE has kicked off the sale process of the country's second-largest food delivery app Yogiyo to ease a monopoly in the domestic market.

KTB Network, wholly owned by KTB Investment & Securities Co., manages 1.2 trillion won in assets. Its 5.6 billion won bet on the Korean fintech company Viva Republica Inc. has produced a hefty return. Last year, the VC firm cashed in half of its investment in the fintech startup, better known for its Toss brand, for 30 times its investment.

Earlier this month, KTB Network mandated both Korea Investment & Securities Co. and NH Investment & Securities to prepare its initial public offering in the junior Kosdaq market.

Write to Byeong-Hun Yang at hun@hankyung.com
Yeonhee Kim edited this article.