[THE INVESTOR] A TPG-led group will invest 500 billion won ($437 million) in a new taxi-hailing service unit of Korea’s largest chat app service provider Kakao, the two companies said on July 30.
The newly spun-off unit, to be called Kakao Mobility, aims to roll out new services in the second half of the year, including corporate taxis, parking and automatic payments.
“Kakao Mobility has an innovative business model that is set to benefit from a rapidly emerging Korean mobility industry,” Tim Dattels, Managing Partner of TPG Capital Asia, said in a statement.
The consortium led by the private equity company, which manages $72 billion in private equity holdings, will end up owning about 30 percent of Kakao Mobility.
The core of the spinoff will remain the two-year-old Kakao Taxi app, which handles about 1.5 million calls daily from roughly 14.9 million users.
Starting from the third quarter, the company will launch a taxi service for businesses and gradually increase the number of advertisements in the mobile application in order to monetize the popular service. Kakao has been providing the hailing service for free to both individual users and taxi drivers so far, sparking questions about its revenue model.
“The online transition of the offline industry is a global trend, and the transition of the domestic mobility industry is just beginning,“ said Kakao Mobility Chung Joo-hwan.
Chung said the company will work to create new value in mobility areas through cooperation with various partners in order to become a win-win solution for both users and business operators.
By Park Han-na and news wires (email@example.com)