SoftBank-backed Ride startup seeks at least US$119m in IPO

SOFTBANK Group-backed car-sharing startup Socar filed for an initial public offering (IPO) of at least US$119 million, testing investor appetite for new tech stocks in an adverse market.

South Korea’s biggest car-sharing service provider plans to sell 4.55 million new shares at an indicative price range of 34,000 won (S$36.46) to 45,000 won apiece, it said in a filing on Friday (Jun 24). The company, which will list on the Korea Exchange on Aug 18, plans to use the proceeds mainly for acquisitions and to cover operational costs.

The IPO will put the startup’s market capitalisation at about 1.2-1.6 trillion won, a company spokesman said.

This compares with a 2.4 trillion won valuation calculated based on its 12-month revenue through March and peer comparison, the company said.

The discount highlights a growing challenge for startups trying to raise funds as stock markets tumble. The benchmark Kospi is down more than 20 per cent so far this year, heading for its worst year since the 2008 global financial crisis.

But the discount may do little to appease SoftBank shareholders who are desperately looking for signs of recovery in a portfolio awash with red. Anxiety remains high that big write-offs might yet be ahead. A number of SoftBank’s portfolio companies have been forced to restructure or raise funds at lower valuations.

South Korea was one of the hottest markets for IPOs during the pandemic, but sentiment has deteriorated as markets plunge on worries over global economic growth. Investors are scaling back their investments in startups and showing tepid demand for IPOs, forcing companies including SK Group affiliates to delay or withdraw their listing plans.

SoftBank Ventures Asia, the Japanese technology conglomerate’s investment arm with about US$1.9 billion assets under management, bought a minority stake in Socar in 2020. Socar’s major shareholders include SK, SK Group’s holdings company, and Lotte Rental. 

Socar, which started its business in Jeju Island with about 200 cars in 2011, now boasts a market share of more than 70 per cent in South Korea’s car-sharing market. It has a total of 7.5 million users, which is equivalent to one-fourth of the country’s population with a driver’s licence, according to the company’s website.

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The IPO will be priced on Aug 4. BLOOMBERG