[Initial Insight] Kakao Mobility and 'Moral Money'

Imagine a day in 2030. When you step out the front door, there will be a yellow Kakao delivery box waiting for you. Items ordered during the day arrive within half a day via Kakao drone delivery. To get around, you open the Kakao Mobility app and call a Kakao UAM (Urban Air Mobility). Avoiding traffic jams on the way home, you fly to your appointment by UAM. The growth potential of Kakao Mobility in logistics and human transportation is limitless.

However, Kakao Mobility’s business is currently at a standstill. Various government regulations, conflicts with social stakeholders, and controversies surrounding its sale have intensified, making aggressive business expansion difficult. It is a platform that stores the movement information of the entire nation and carries the weight of being the livelihood of many. Despite these constraints and burdens, Kakao Mobility is a company that Kakao absolutely cannot give up. As technologies such as autonomous driving, UAM, drone delivery, and robot delivery advance, the value of Kakao Mobility will increase exponentially.

Capital that recognized this potential has joined in. It is Asia’s largest private equity fund, MBK Partners. This domestic private equity fund, which also manages funds for the National Pension Service, highly values the future potential of Kakao Mobility. The sale proposal was first made by Kakao. The background likely includes the market downturn delaying Kakao Mobility’s IPO, which could have allowed foreign financial investors to demand strong penalty clauses.

The most likely sale scenario under consideration does not involve Kakao completely exiting Kakao Mobility. MBK would hold about 50.01% of the shares, and Kakao would remain the second-largest shareholder. The scenario involves swapping most of the shares held by foreign financial investors to MBK. While MBK was conducting due diligence after reaching an agreement, the Kakao Mobility sale process was suddenly put on hold. It was engulfed in strong social backlash, and Kakao Mobility’s internal team decided to propose social coexistence measures. Kakao announced the postponement of the sale.

The spark for the sale still remains. MBK’s intention to acquire Kakao Mobility is stronger than expected. MBK is envisioning a big picture through Kakao Mobility. In that vision, the parking lots of 140 Homeplus stores nationwide become landing pads for Kakao UAM, as well as charging stations, vehicle maintenance centers, and parking lots for Kakao electric taxis. Leveraging its status as Asia’s largest private equity fund, MBK also aims to serve as a lever for Kakao Mobility’s expansion into Japan, China, and Southeast Asia.

Many variables exist in Kakao Mobility’s future. But the most important point is that Kakao Mobility is not simply a platform that can be bought with money. Kakao Mobility will build the digital transportation infrastructure for the entire nation. It is a future sea of information that infinitely contains the movement data and logistics information of the entire population, which will be most valuable in the autonomous driving era. It is a platform that will open the era of autonomous driving and UAM, becoming the feet and wings of the entire nation. It is also the current workplace for hundreds of thousands of drivers.

Whether Kakao continues to maintain its position as the largest shareholder or some private equity fund forms a mega-fund including the capital power of the National Pension Service to acquire it, the conclusion we want is the same. The ownership of Kakao Mobility must be different from simple capital or an ordinary company. Only “moral money” and a “trustworthy company” that can fulfill social roles for 50 million citizens can be its owner. It must be a vessel capable of embracing the entire nation.

Soyeon Park, Deputy Head of the Capital Markets Department