Google Inc. will acquire 56.5 billion won ($50 million) worth of new Kakao Mobility Corp. shares, in a strategic investment in the South Korean mobility startup keen to adopt self-driving technology.
The investment was announced on Apr. 1, simultaneously with the official launch of a mobility joint venture between South Korea's No. 1 mobile carrier SK Telecom Co. and Uber Technologies Inc., signaling heated competition in the domestic market for taxi hailing and designated driver services.
"We are now in the same boat as Google," said a Kakao Mobility source. "We will cooperate to create synergy between Google's services and Kakao Mobility's platform business."
Google will buy 970,848 shares in unlisted Kakao Mobility to be issued for 58,205 won apiece later this month, according to Thursday's regulatory filing by Kakao Corp., the mobility venture's parent company. Google's investment constitutes a 1.7% stake in Kakao Mobility.
Its acquisition price is the same as that paid by The Carlyle Group when the US private equity firm pumped $200 million into the mobility startup via a rights offering in February. At the time, it amounted to a 6.7% stake in the Korean startup.
Kakao is expected to cooperate closely with Google's Waymo on self-driving technology, utilizing the US firm's large datasets built with other mobility companies in developed countries. Waymo began as a self-driving car project in Google and spun off to become a subsidiary of Alphabet Inc., the parent company of Google, in 2016.
Ryu Gung-seon, chief executive of Kakao Mobility, said in a statement that the company will maximize synergy with Google to grow into a major global player. Back in 2018, Google offered Kakao Mobility’s navigation app KakaoNavi via its smart driving platform Android Auto.
Kakao Mobility has an 80% share of the country’s taxi-hailing market and its transportation service app Kakao T has around 27 million users.
Google's share purchase in the Korean startup comes just a day after sources said South Korean refiner GS Caltex Corp. will invest around 30 billion won in Kakao Mobility to strengthen their business tie-up.
Separately, SK Telecom's mobility spin-off T Map Mobility launched a joint venture with Uber, UT LLC, on Thursday. The JV will soon unveil a new platform combining both companies' taxi-hailing services.
SK Telecom had said the JV would promote the e-hailing business in Korea by combining T Map Mobility's network of drivers and mapping technology with Uber's ride-hailing technology and global operations expertise. Uber, the world’s largest mobility platform company, has agreed to invest over $100 million in the JV.
Write to Min-Ki Koo at kook@hankyung.com
Yeonhee Kim edited this article.
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