SocarSouth Korea’s biggest car-sharing startup, tumbled in its debut on the Seoul stock market on Monday, even as share prices were below the lower end of the trading range.
Socar shares rose 1.25 percent from their IPO price of 28,000 won ($21.10) in the first minutes of the debut, before falling to 26,300 won, giving the firm a market capitalization of $642 million.
Last week, Socar cut its target IPO offer to 102 billion won ($78.1 million), giving the car-sharing company a valuation of 966.5 billion won ($731 million) before trading began.
Socar’s debut comes amid a slow period in South Korea’s IPO market, which has prompted a number of Korean companies to delay their listing plans.
Analysts attributed Socar’s muted debut-day performance to expensive valuations and a slowdown in an IPO market reeling from the global economic downturn.
Jaeuk Park, CEO of Socar, told TechCrunch earlier that the company is moving ahead with its plans to list because it is confident in its performance and expects to generate both operating profits and net profits by the end of this year.
Instead of waiting for the stock market to recover for a higher valuation in the next two to three years, he said, the Korean mobility startup prioritized investments in organic/inorganic growth with IPO proceeds.
“First, Socar’s growth has been faster than expected in the face of reopening [after the COVID-19 pandemic]Park said. “The stock market is expected to be difficult at the moment, but the mobility industry will grow rapidly, so we cannot miss this critical moment; we will focus on accelerating M&A and investment in new businesses and technologies.”
The company plans to boost its services and geographic expansion efforts through acquisitions to become a super mobility app with a 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, South Korea’s first and only unicorn mobility startup, aims to become the first registered profitable unicorn company, Park noted.
Socar, backed by SoftBank and Korean strategic investor SK Inc, entered the unicorn club with rough Funding of 183.2 billion won ($150 million) on 1.3 trillion won (approximately $1 billion) in March from Lotte Rental, the car rental unit of South Korea’s Lotte Group. The startup has raised a total of 379.7 billion won ($284.2 million) since its inception in 2011 before the 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 started the car-sharing service with 100 rental cars in Jeju, now operates a fleet of more than 19,000 vehicles nationwide, offering services including car sharing, car rental, electric bike rental , parking, vehicle management and vehicle maintenance. It will launch its transport super app later this year, providing all-in-one mobility services. In addition, Socar is building an ecosystem for future mobility, including an autonomous driving platform, electric car charging station service and micromobility.
Park said in an interview that Socar wants to enter the Southeast Asian market with its new business service, a B2B SaaS fleet management system (FMS), which it plans to start selling later in the fourth quarter of this year. Socar, based on its 19,000 vehicles, has built FMS technology, which uses data such as vehicle location and surroundings to maintain effective monitoring and control systems, providing accurate information to drivers and control servers.
“FMS is different from car sharing, which has been Socar’s flagship business for the past ten years, and if it stabilizes, it is a B2B SaaS that guarantees a high profit ratio,” Park said.
Socar claims the company has captured about 80% of the market share in South Korea, with more than 11.4 million users and 1.4 million monthly active users this year.
The Korean ride-hailing company established Socar Malaysia, 79% 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 selling VCNC, Park joined to Socar’s Chief Strategy Officer (CSO) to lead Socar Tada’s transportation business and took over as Chief Executive Officer (CEO) in 2020 after Lee stepped down.
Korean game maker Krafton acquired the messaging applications unit of VCNC in May 2021, while Viva Republica, Korean operator of financial super app Toss, bought 60% of Tadathe shipping business of VCNC, for an undisclosed sum in October last year.
Meanwhile, South Korea’s TMap Mobility, whose investors include Uber Technologies and SK Inc’s investment firm SK Square, said Monday it has raised $149.2 million (200 billion won) from strategic investor KB Bank. Another Korean car-sharing platform, Kakao Mobility, was also planning an IPO between 2022 and 2023. said last week it has terminated its sales negotiations with the Korean private equity firm MBK Partners.