Here’s my number, so kalbi maybe 🍖
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Let’s go Yogiyo
Food service delivery app Yogiyo is up for grabs as parent company Delivery Hero scrambles to lock in buyers in time to meet regulatory conditions.
Backstory: Germany-based Delivery Hero decided to purchase Korea's leading food delivery service Baedal Minjok (Baemin) from Woowa Brothers back in December 2019. The $4.3 billion dollar deal should have taken the cost of Aspirin into account given the headache it has caused with regulators. Last year, Delivery Hero was told by the Korea Fair Trade Commission that they had to divest from their other Korean operations within a year to satisfy antitrust requirements.
Yogiyo is Korea's second largest food delivery service behind Baedal Minjok. It's also been losing market share to Coupang Eats, which is aggressively expanding with fresh funds from their recent IPO.
The scoop: Yogiyo has received 10 preliminary bids from the likes of retailers such as Shinsegae and private equity firms such as Bain Capital. Delivery Hero is reluctant to sell to Naver, Kakao or Coupang fearing future competition in the market segment, but they’re hard pressed to get a good deal.
The deadline to sell is tight and buyers know it. The price tag for Yogiyo might see a drop from its estimated $1.8 billion. If Delivery Hero doesn't sell Yogiyo in time, the penalty is 1/10,000th of the transaction’s value - that comes out to $452,000 per day.
Whale, search “whale”
Naver is beefing up its web browser Whale to gain on Google Chrome's dominant market position.
Backstory: Naver spent 6 years developing Whale from scratch. Built on Chromium, Google's own open source project, Whale functions sort of like Chrome but its user experience is a lot more 'Asian'. Instead of going by Google's simple outlay, Whale offers every option right up front - in line with Naver's busy homepage.
The scoop: Since Whale's release in October 2017, it has seen several iterations. Arguably its most remarkable feature is omni-tasking, a split screen function that allows users to browse two websites in the same tab. The feature is so hype that Naver is looking to partner with LG to make dedicated dual-screen hardware to optimize the experience.
Looking forward: Whale has set out to become Korea's leading web browser in 3 years - that’s a bold ambition given Chrome currently controls 60% of the market.
Musinsa’s got Style
Fashion platform Musinsa is in talks with StyleShare to acquire both its namesake platform and subsidiary 29CM.
Backstory: Musinsa is Korea's largest fashion e-commerce marketplace by membership with over 8 million users. They saw their sales increase by 51% in 2020, recording an operating profit of $50 million. Slacks, the flagship product of Musinsa Standard, sold more than a million products last year.
In light of growing competition from Shinsegae's expansion with W Concept and Kakao's acquisition of ZigZag, Musinsa has been making more TikTok videos to appeal to Gen Z. The acquisition of StyleShare’s platforms can open the company up to more diverse consumers than their current streetwear fanbase.
Between StyleShare and 29CM, the latter is actually doing better than the former. Last year, 29CM recorded $23 million in sales (up 71% from 2019) while StyleShare generated only $13.4 million (down 3% from the previous year). On a similar note, while 29CM made an operating profit last year ($900 thousand), StyleShare saw their losses grow to nearly $10 million.
The scoop: The deal is rumoured to have been brokered by their mutual shareholder IMM Investment. The micro venture capital firm behind names such as Krafton and Woowa Brothers invested in StyleShare back in 2017 and then in Musinsa earlier this year ($105 million with Sequoia Capital). The deal between Musinsa and StyleShare has yet to be confirmed but it’s looking imminent.
On the radar
Companies raising over $1 million last week.
WashSwat is raising $15 million in a Series B deal from UTC Investment, Industrial Bank of Korea, KB Securities, ES Investment and T Investment for their laundry service platform.
Quantec is raising $7 million in a Series B deal from OrbiTech and Shinhan Capital for their robot financial adviser.
People & Technology is raising $2.7 million in a Series A deal from Ajou IB Investment, Magellan Technology Investment and Kingo Investment Partners for their intelligent geolocation and smart sensing platform.
Inchrogene is raising $2.6 million in a Series A deal from Insight Equity Partners for their genome analysis proprietary technology.
Bamboo Network is raising $2 million in a Series A deal from F&F Partners and Xntree Ventures for their digital content creation.
SpentdIt is raising $1.8 million in a Series A deal from Korea Investment Partners and Signite Partners for their personal finance management platform.
More Seoul Hits
Turning the global investment model on its head. A deep dive into Coupang’s IPO and Korea’s “think global, do local” model for success.
Kakao’s Q1 Earnings. Kakao segments its business into two main lines: platform (53% of their revenue) and content (47%). Notably, it was the first year that more than 10% of sales came from overseas markets.
A Twosome IPO. Twosome Place, owned by Anchor Equity, is looking to become the first listed coffee chain in the country. Just in time for bingsu (shaved ice dessert) in summer flavours.
Kalbi, maybe?
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