South Korea-based internet company Kakao partnered private equity group TPG on Friday to establish a new subsidiary called Kakao Mobility with ₩500bn ($437m) in funding.
TPG led the round, though the identities of any other investors have not been disclosed.
Kakao Mobility will operate a range of the firm’s existing brands, including ride-sharing app Kakao Driver, taxi service Kakao Taxi and navigation app Kakao Navi. The spinout is also expected to introduce additional products, such as a parking service, in the second half of 2017.
The capital will be used to scale Kakao Mobility’s business and help launch new products. It will also drive the growth of Kakao Taxi, which is used by about 1.5 million people domestically or internationally each day.
The company plans to introduce a corporate version of Kakao Taxi and will integrate automatic payment through payment processing platform Kakao Pay in partnership with Korea Smart Card, which manufactures South Korea’s public transportation pass cards.
Kakao Navi’s platform will also be developed further, integrating real-time traffic information and using big data technology to predict traffic volume ahead of holidays. The service had 10 million users as of last month.
The capital will additionally be used to accelerate the growth of Kakao Driver, which counted 2.7 million users in June 2017, through increased marketing efforts. Joohwan Jung, previously vice-president of Kakao’s mobility business, will serve as CEO of Kakao Mobility.
Jung said: “As part of larger global trends, the traditional offline industry sector has been undergoing rapid transformation into developing online offerings, with the mobility business a particularly exciting and high-attention area.
“We see infinite opportunities ahead, and will strive to create new value for both users and businesses across the mobility business through strategic partnerships and by securing the top talent.”
Kakao previously spun out Kakao Pay in February 2017, supported by a $200m investment from Ant Financial, the financial services affiliate of China-based e-commerce group Alibaba.