South Korea’s taxi-sharing app operator Kornatus said on June 17 it has received 1.2 billion won ($1 billion) in early-stage round funding from domestic venture capital firms, just before the apps’ official launch.

Investors in the round include newly founded VC Thoughts Become Things, as well as seasoned Bon Angels and SparkLabs Ventures.

Courtesy of Kornatus

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The app, called Banbantaxi, allows multiple users to share a taxi ride and its fare, if they are heading to the same direction. The driver cannot engage in the taxi-sharing and fare-splitting process. Only those of the same gender will be allowed to share a taxi. The app will accept payments only through preregistered cards.

The app is expected to address the chronic shortage of late-night taxis in Seoul and will be a a win-win solution for both riders and drivers, the mobility startup said.

Taxi drivers often refuse to take customers if the distance is too short or the customers have to go in the opposite direction, as multiple drivers operate a single corporate taxi service. This has added to a shortage in cab operations at night leading to customer inconvenience.

“Taxi drivers (in Korea) have lashed out against the introduction of ride-sharing mobility services and caused social conflict,” TBT Chief Growth Officer Kim Dong-wook, who led the funding round, said in a statement. “The power of technology will help taxis take the lead in innovation.”

The app has added a network of some 1,600 cab drivers since its launch in April. The app for customers is set to be launched in July.

Kornatus was founded in June 2018 and is headquartered in Pangyo -- Korea’s largest startup hub located in Gyeonggi Province.

By Son Ji-hyoung (consnow@heraldcorp.com)