Kakao Mobility seeks to buy European taxi platform FreeNow

The Korean mobility platform will suggest $154 million to buy an 80% stake in FreeNow, backed by BMW and Mercedes-Benz

Taxi using Kakao Mobility's ride-hailing service (Courtesy of Yonhap News)
Taxi using Kakao Mobility's ride-hailing service (Courtesy of Yonhap News)
Jun-Ho Cha 2
2023-11-16 17:00:39 chacha@hankyung.com
Tech, Media & Telecom

Kakao Mobility Corp., a ride-hailing service unit of South Korean tech giant Kakao Corp., is planning to acquire FreeNow, a European taxi platform operator backed by BMW Group and Mercedes-Benz Mobility AG.

The largest taxi-hailing service provider in Korea will join a bid to buy FreeNow and suggest around 200 billion won ($153.9 million) for an 80% stake, sources familiar with the situation said on Wednesday.

Among other bidders are global ride-hailing services firms including Uber Technologies, OIa Cabs and Gett, according to sources.

FreeNow is one of the largest ride-hailing service providers in Europe, operating services for taxis, car sharing, private hire vehicles, e-bikes and e-scooters in nine countries including Germany, France, the UK, Italy, Spain, Poland and Ireland.

The firm was founded as mytaxi in Hamburg in 2009 and merged with UK rival Hailo in 2016. The merged entity was renamed FreeNow in 2019 as BMW Group and Daimler AG, which became Mercedes-Benz last year, jointly injected €1 billion ($1.1 billion) in the taxi platform and four additional firms to foster the auto giants’ urban mobility services.

It is unclear whether Kakao Mobility will be able to finalize the deal, due to the legal issues with the subsidiary and parent company.

Kakao Chief Investment Officer Bae Jae-hyun was indicted by Korean prosecutors over alleged stock manipulation to take over K-pop agency SM Entertainment Co. on Nov. 13.  

On Wednesday, Kakao founder and Chairman Kim Beom-soo and CEO Hong Euntaek were also indicted over alleged stock price manipulation.

Additionally, Kakao Mobility has been facing negative publicity over discriminating against taxi drivers not subscribed to its paid membership. Korea's antitrust body Fair Trade Commission (FTC) fined it 27.1 billion won in June, slightly more than the penalty tentatively calculated in February of this year.

Market insiders expect that it won’t be easy for Kakao Mobility to close an M&A deal anytime soon as the parent company plans to refrain from business expansion for the time being.  

Meanwhile, Kakao Mobility acquired British ride-hailing startup Splyt in March this year, marking its first overseas takeover. The Korean mobility platform is planning to use the European market as a bridgehead from which to speed its global expansion, market insiders said.

Write to Jun-Ho Cha at chacha@hankyung.com


Jihyun Kim edited this article.
#Kakao Mobility Korea #Kakao Korea #taxi hailing app Kakao #Kakao T Korea #Korea taxi ride hailing app #Kakao to buy FreeNow #FreeNow Europe

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