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Car-sharing platform SoCar to go public this month

SoCar CEO Park Jae-wook speaks during a press conference at Conrad Seoul in Yeouido, Seoul. (SoCar)
SoCar CEO Park Jae-wook speaks during a press conference at Conrad Seoul in Yeouido, Seoul. (SoCar)

South Korean car-sharing company SoCar said Wednesday it planned to debut in the nation‘s benchmark Kospi to expand its footing in the mobility industry worth 350 trillion won (267.6 billion) and growing.

The company will decide soon whether to float 4.55 million shares or not on Aug. 22 after testing the water with the two-day preliminary proceedings scheduled on Thursday and Friday. The preferred share price is set between 34,000 won and 45,000 won. The main underwriter is Mirae Asset Securities.

“We will use 60 percent of the IPO funds to acquire startups including self-driving tech companies, 20 percent to boost mobility software, electric bicycle and parking business, and the remaining 20 percent to invest in research and development of innovative technologies,” said Park Jae-wook, SoCar CEO, during a press conference.

Park said the SoCar app will start providing reservation services for the high-speed KTX train by this year and even electric bicycle-sharing and car parking services in the near future.

The company is also gearing up to enter the global mobility market with its Fleet Management System, which monitors and compiles data including car mileage, location, and performance indicators on engines, batteries and vehicle consumables.

Domestic players like Hyundai Glovis, a supply chain management arm under Hyundai Motor Group, and Lotte Global Logistics, logistic firm under the retail giant Lotte Group, have already signed deals to adopt SoCar’s software system.

SoCar also plans to expand self-driving service to regions other than Jeju Island.

Park stressed that as the first mobility Unicorn in Korea, SoCar has taken a more-than 79 percent share of the domestic car-sharing market. It operates more than 19,000 cars and 4,500 car-sharing zones in the metropolitan region and other major cities such as Daejeon, Busan, Daegu and Gwangju.

“Despite the coronavirus pandemic, our sales revenue has increased on-year by 31.2 percent and 35.3 percent last year and the first half of 2022, respectively,” said Park. “In terms of profit before tax, we posted minus 0.9 percent, surpassing that of global mobility giants like Grab, Uber and GoTo, which logged minus 153 percent to minus 17 percent.”

Park said the company was expected to turn a profit this year based on improving business efficiency and the growing number of paid membership users. “Although we are buying more cars to meet the growing demand for car-sharing, margin per car is increasing. The 162,000 membership users frequently use our service, becoming the key source of surge in sales as well.”

Park added that despite the dramatic slowdown of IPO market, he expects SoCar to receive a high valuation thanks to its profit-generating business portfolios and the fast-growth of the mobility market.

“Also, the second and third largest shareholders, SK Inc. and Lotte Rental signed a deal not to sell their shares during the lock-up period of six months after the IPO,” Park said.

Founded in 2011, SoCar provides car-sharing, electric bicycle-sharing and parking services. Last year, it sold a 60 percent stake in Tada, the company’s mobility platform subsidiary, to the fintech giant Toss.

By Byun Hye-jin (hyejin2@heraldcorp.com)
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