Socar, South Korea’s biggest car-sharing startup, tumbled on its Seoul stock exchange debut on Monday, even after pricing shares below the lower end of a traded range.
Shares of Socar rose 1.25% from its IPO price of 28,000 won ($21.10) in the opening minutes of the launch, before dropping to 26,300 won and giving the company a market cap of $642 million.
Last week, Socar cut its targeted IPO offering to 102 billion won ($78.1 million), giving the car-sharing company a valuation of 966.5 billion won ($731 million). ) before trading begins.
Socar’s debut comes amid a sluggish period in South Korea’s IPO market that has prompted a series of Korean companies to delay their IPO plans.
Analysts attributed SOCAR’s weak first-day performance to expensive valuation and a slowing IPO market reeling from the global economic slowdown.
Jaeuk Park, CEO of Socar, told TechCrunch earlier that the company is continuing with its listing plans as it is confident in its performance and expects to generate both operating profit and net profit by the end. of this year.
Rather than waiting for the stock market to recover for a higher valuation over the next two to three years, he said, the Korean mobility startup has prioritized investments in organic/inorganic growth. with proceeds from the IPO.
“First of all, Socar’s growth is faster than expected in the face of the reopening [after the COVID-19 pandemic]”, said Park. “The stock market should be difficult at the moment, but the mobility industry will experience rapid growth that we cannot miss this critical period; we will focus on accelerating mergers and acquisitions and investments in new businesses and technologies.
The company plans to bolster its services and geographic expansion efforts through acquisitions to become a mobility super-app with the goal of posting 1 trillion won ($748 million) in revenue by 2025, up from 289 billion won last year, Park continued. It aims to achieve 30% or more annual revenue growth by 2025, he added.
Socar, the first and only unicorn mobility startup in South Korea, aims to become the first publicly traded profitable unicorn company, Park noted.
SoftBank-backed Socar and Korean strategic investor SK Inc entered the unicorn club with approximately 183.2 billion won ($150 million) in funding for 1.3 trillion won (about $1 billion) in March from Lotte Rental, South Korea’s car rental unit. Lotte group. The startup has raised a total of 379.7 billion won ($284.2 million) since its inception in 2011 before its IPO.
The company’s major shareholders, including SoftBank, SK Inc, Lotte Rental and Altos Ventures, will retain their stake as they agreed to a lock-up period of up to six months.
The 11-year-old company, which launched the car-sharing service with 100 rental cars in Jeju, now operates a fleet of more than 19,000 vehicles across the country, offering services including car-sharing, car rental cars, rental of electric bicycles. , parking, vehicle management and maintenance. It will launch its transportation super app later this year, offering all-in-one mobility services. In addition, Socar is building an ecosystem for future mobility, including an autonomous driving platform, a charging station service for electric cars and micro-mobility.
Park said in an interview that Socar wants to enter the Southeast Asian market with its new SaaS B2B Fleet Management System (FMS) service which it plans to start selling later in the fourth quarter of this year. year. Socar, based on its 19,000 vehicles, has built FMS technology which uses data such as location and surroundings of vehicles to support effective monitoring and control systems, providing accurate information to drivers and management servers.
“FMS is different from car-sharing, which has been Socar’s core business for ten years, and if it stabilizes, it’s a B2B SaaS that guarantees a high profit rate,” Park said.
Socar claims the company has captured around 80% of the market share in South Korea, with over 11.4 million users and 1.4 million monthly active users this year.
The Korean car rental company established Socar Malaysia, a 79% stake owned by SK Inc, and launched services in Malaysia in 2018 and Indonesia in 2020.
Socar was founded in 2011 by Lee Jae-woong, who co-founded South Korea’s largest internet portal operator, Daum Communications; Daum merged with Kakao in 2014. Jaeuk Park, a serial entrepreneur, who founded VCNC, an operator messaging app for couples called Between, in 2011, sold VCNC to Socar in 2018. After the sale of VCNC , Park joined Socar’s Chief Strategy Officer (CSO) to lead Socar’s ridesharing business, Tada, and hired the Chief Executive Officer (CEO) in 2020 after Lee resigned.
Korean game maker Krafton acquired VCNC’s messaging app unit in May 2021, while Viva Republica, a Korean financial super operator Toss, bought a 60% stake in Tada, the ride-sharing business of VCNC, for an undisclosed amount in October last year.
Meanwhile, South Korean company TMap Mobility, whose investors include Uber Technologies and SK Inc’s investment firm SK Square, announced on Monday that it has raised $149.2 million (200 billion won) from the strategic investor KB Bank. Another Korean car rental platform, Kakao Mobility, which had also planned an IPO between 2022 and 2023, said last week that it had ended its sales talks with the Korean capital firm. MBK Partners investment.