Socar South Korea’s biggest car-sharing startup tumbled Monday in its Seoul stock exchange debut, despite pricing shares at the bottom of a marketed range.
Socar shares rose 1.25% from its IPO Price of 28,000 won ($21.10) within the first minutes of the debut before plummeting to 26,300 won, giving the firm a market capital of $642 million.
Socar lowered its target IPO offer to 102 billion won ($78.1 Million), giving the car-sharing firm a valuation of 966.5 million won ($731,000,000) before trading began.
Socar’s debut occurs amid a slow period in South Korea’s IPO market that has prompted a number of Korean companies to postpone their plans.
Analysts attributed Socar’s weak debut day performance to a high valuation and slowdown of the IPO market, which is still reeling from the global economic downturn.
Jaeuk Park, Socar’s CEO, stated earlier to that Socar was moving forward with its listing plans due to its confidence in its performance. He also said that Socar expected to generate both operating and net profits by year end.
He said that the Korean mobility startup prioritised investment in organic/inorganic growth, rather than waiting for the stock exchange to recover for a higher value for the next two-three years.
Park stated that Socar’s growth was faster than expected after the COVID-19 pandemic. The stock market will be difficult for the moment, but the mobility sector will grow quickly that we cannot miss this crucial time. We will concentrate on acceleration of mergers and acquisitions as well as investments in new technology and businesses.
Park said that the company will increase its services and geographical expansion efforts through acquisitions in order to be a mobility super-app. The goal is to post 1 trillion won ($748m) of revenue by 2025. This figure is up from 289billion won last year. He stated that the company aims to grow its annual revenue by 30% or more by 2025.
Park stated that Socar, South Korea’s first and only unicorn mobility startup, hopes to be the first listed, profitable unicorn company.
Since its inception 11 years ago, the company manages more than 19,000 vehicles throughout the country. Services include car-sharing, car hailing, electric bicycle rental and parking. The company will soon launch the transportation super-app, which provides all-in-one mobility solutions. Socar is also building an ecosystem for future mobility. This includes an autonomous driving platform and charging stations for electric cars.
Park stated in an interview that Socar is looking to enter Southeast Asia with its new business, the fleet management system (FMS), B2B SaaS. It plans to start selling this service later in the fourth quarter. Based on 19,000 vehicles, Socar has developed the FMS technology. It uses vehicle location data to support monitoring and control systems that provide accurate information to drivers as well as management servers.
Park stated that FMS is different than car-sharing. However, it has been Socar’s flagship business for the past 10 years. If stabilized, it can be a B2B SaaS which guarantees a high profit ratio.
Socar claims to have captured approximately 80% of South Korea’s market share, with over 11.4 million users and more than 1.4 million active users per month.
Socar Malaysia, a 79% share of SK Inc has been set up by the Korean car-hailing company and services will be launched in Malaysia and Indonesia in 2018.
SoftBank and SK Inc, a Korean strategic investor, backed Socar. In March, Socar received 183.2 billion won ($150m in March), funding at a 1.3 billion won (approximately $1.1 billion in March) from Lotte Rental, the rental vehicle unit of South Korean Lotte. Since its inception in 2011, the startup has raised 379.7 Billion Won ($ 284.2 Million) in total.
Since they agreed to a lockup period of up six months, the company’s major shareholders, SoftBank, SK Inc and Lotte Rental, will retain their shares.
Lee Jae-woong was the co-founder of South Korea’s largest online portal operator Daum Communications in 2011. Socar was established in 2011. Jaeuk Park is a serial entrepreneur who co-founded VCNC, a messaging app for couples called Between. In 2011, VCNC was sold to Socar. Park was a serial entrepreneur who founded VCNC, a messaging app for couples called Between. He then sold VCNC to Socar in 2018.
In May 2021, Krafton, a Korean game developer, acquired VCNC’s messaging app unit. Viva Republica (a Korean financial superapp Toss operator) purchased a 60% stake at Tada, the ride-hailing company of VCNC for an undisclosed sum in October 2017.
TMap Mobility in South Korea, whose investors are Uber Technologies and SK Inc, announced Monday that it had raised $149.2million (200 billion won). The strategic investor KB Bank was also involved. Kakao Mobility, a Korean car-hailing platform, also planned an IPO in 2022 and 2023. stated last week that it had ended its sale talks with Korean private capital firm MBK Partners.