July 11, 2020

S. Korean startups use M&As to improve apps, services

PUBLISHED : November 15, 2019 - 20:41

UPDATED : November 15, 2019 - 21:34

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Let’s say a car-sharing startup tries to launch a business. It will essentially have to buy cars and develop a mobile app for people to use. But that is just the beginning.

The startup realizes cars operate remotely, so it finds a need to a control-system for cars -- which have to be regularly maintained, fixed and insured. To address growing number of users, the company has to look for a financing method to buy more cars. For future growth and competitive edge, it collects and analyzes user data to improve the app and user experience.

Based on his recollection, Wi Hyun-jong, chief strategy officer of Korea’s No. 1 car-sharing app operator SoCar, said no single startup could handle all above.

“This is not a matter we can solve by putting together excellent developers in a single company,” he said. “We need a concerted effort with other startups that have their own strength and original expertise to deal with increasingly convoluted problems that our service faces.”

Wi was one of the speakers at a panel session of Tech Meets Startup 2019 hosted by Naver D2 Startup Factory at COEX, Seoul. 

For SoCar to pursue such concerted efforts, mergers and acquisitions are key, Wi added, calling its business arms a part of “ecosystem.”

This led to SoCar’s five investment into, or acquisition of, startups here for 1 1/2 years since April 2018.

These are Polariant, whose core technology keeps GPS signal active in indoor facilities, ChaCare, a startup dedicated to car maintenance, early-stage micromobility facility Elecle, autonomous driving technology startup RideFlux and last but not least, van-hailing app operator VCNC.

“In the face of a new value chain, it is hard to think we can handle everything on our own,” he said.

The panel session, dedicated to inter-startup M&As, was also joined by accommodation booking unicorn Yanolja’s senior manager Shin Sung-chul and food delivery unicorn Woowa Brothers’ investment team leader Joo Jong-ho.

For Yanolja, as it franchises more hotel properties, it needs to address new issues in its leap forward to becoming a superapp that works globally.

These could be the check-in and check-out automation, property management system, online travel agency platforms, internet of things-powered room management system, concierge, restaurants, and exterior design renovation. It also need to diversify the booking platform’s property inventory from motels to hotels, guest houses, private homes offered and lodging facilities.

“There are many problems to deal with regarding a hotel property and customers to improve the app," Shin said. "Yanolja is capable of handling some of them whereas some of them we cannot. Our target of investment is the players that handle what we cannot do.”

With M&As, Yanolja and other startups could head toward the same direction and tackle problems together in its move to transform undigitized data related to accommodation, he added.

Joo of Woowa Brothers said the food tech startup is looking to invest in startups dedicated to food tech, deep tech and consumer internet to secure long term-partnership opportunities to “expand to an untapped realm.”

These include Adriel, a digital advertising startup, and Silicon Valley-based Bear Robotics, an autonomous robot maker for restaurants. While Woowa‘s Adriel acquisition was meant to capitalize on the platform‘s machine-learning technology, Bear Robotics‘ technology has apparently contributed to the birth of robot-serving restaurant at its headquarters in August.

Each year, Woowa Brothers use some 15 billion won ($12.9 million) cash for startup investments or acquisitions, according to Joo. Its goal is to close a combined investment up to 60 billion won in startups.

The company has currently launched operations in Singapore for future overseas M&A opportunities beyond its Vietnamese operation, envisioning more deals, worth up to $3 million each.

By Son Ji-hyoung (

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