Kakao Joins Hands with TPG to Establish Kakao Mobility

Kakao, Korea’s largest online and mobile platform operator, and TPG, a global alternative asset firm, announced on June 30 a strategic partnership to establish an independent Kakao Mobility. Under the partnership, a TPG-led consortium will invest 500 billion won (US$450 million) into Kakao’ mobility business, enhancing its ability to reach more customers with a broader range of innovative services.

Kakao Mobility will provide the Kakao Taxi, Kakao Driver, and Kakao Navi services and introduce new services in the second half of this year, including a parking service. Kakao initially decided to spin off its mobility business and establish Kakao Mobility last month as part of its strategic move to pursue new growth in the mobility business. For the business management, Jung Jooh-wan, the former vice president of Kakao’s mobility business, has been appointed as CEO of the new legal entity.

“We see infinite opportunities ahead, and will strive to create new value for both users and businesses across the mobility business through strategic partnerships and by securing the top talent,” said Jung.

“For many years, across the firm’s platforms, we have been focused on identifying and partnering with disruptive companies similar to Kakao Mobility that are challenging, transforming, and evolving existing industries,” said Tim Dattels, Managing Partner of TPG Capital Asia.

With the new investment, Kakao plans to accelerate the commercialization of Kakao Taxi, which currently receives up to 1.5 million calls daily. A corporate call taxi service will be introduced in the third quarter of this year. An automatic payment system Kakao Pay is also under development in partnership with Korea Smart Card Corporation and global expansion will be speeded up, as shown in the collaboration with Japan Taxi in Japan. Kakao Taxi will also offer test drives via partnerships with local and global car manufacturing companies.

Kakao Driver, which recently celebrated its first anniversary, will accelerate its growth with expanded marketing initiatives. The number of users for Kakao Driver service, which celebrates its first anniversary, grew from 2.2 million in February 2016 to 2.7 million in June 2017, with almost 70% in return users within four weeks.

Kakao will also continue its efforts to enhance Kakao Navi through big data. Navigation using real-time traffic information, prediction of traffic volume prior to holiday seasons, and recommendations of popular or frequently visited destinations will be a key focus for the service. As of June 2017, Kakao Navi has 10 million users, with the number of users and monthly usage grown by 87% and 92%, respectively, since the service’s launch in February 2016.