[IPO] Park Jae-wook, CEO of Socar, "Turning Profitable This Year... Launching Integrated Mobility 'Super App'"

Park Jae-wook, CEO of Socar, is introducing the company at a press conference held on the 3rd in Yeouido, Seoul. Photo by Socar

[Asia Economy Reporter Jang Hyowon] “Among global mobility platforms, only Socar will record a profit this year.”

On the 3rd, Socar CEO Park Jae-wook held a press conference in Yeouido, Seoul, for the KOSPI listing and stated, “While other mobility platforms spend 20-30% of their sales on marketing costs, Socar controls it at around 2.7% based on technology and economies of scale.”

Founded in 2011, Socar operates mobility platform businesses including car-sharing, electric bicycle sharing, and platform parking services. It is the number one operator with a 79% market share in the domestic car-sharing market.

The main product is “short-term car-sharing,” which allows users to reserve and control vehicles parked at “Socar Zones,” the vehicle rental locations, via an app, available from a minimum of 30 minutes in 10-minute increments. It also offers a subscription service called “Socar Plan” on a monthly basis. Additionally, it operates services such as the electric bicycle sharing platform “Elecle” and the online parking platform “Modu’s Parking.”

Socar services more than 19,000 vehicles at over 4,500 Socar Zones nationwide. Approximately 81% of the population in major domestic cities including Seoul, the metropolitan area, and six metropolitan cities can access Socar Zones within a 500-meter radius of their residence. Eight million people, or one in four licensed drivers, are Socar members, and including Modu’s Parking and Elecle, it has secured 11.38 million subscribers.

Socar’s core technology is “data.” Through machine learning-based analysis, it effectively combines accumulated driving data of 1.765 billion kilometers from its fleet, vehicle maintenance data, and user data to optimize vehicle allocation, pricing, and promotions. This increases vehicle utilization rates and reduces management costs.

Based on the business strategy of seamless mobility service called “Streaming Mobility,” Socar plans to launch a super app this year. Within the super app, users will be able to access car-sharing, KTX reservations, electric bicycle services, shared parking, and accommodation bookings.

Furthermore, Socar plans to commercialize its vehicle management system (FMS) used for vehicle control to secure new revenue sources. CEO Park said, “We will convert FMS into Software as a Service (SaaS) and provide it as a solution to logistics and transportation companies,” adding, “Overseas expansion will also proceed through supplying FMS solutions rather than car-sharing business.”

Socar’s total number of shares offered is 4.55 million, all newly issued shares. The desired offering price per share is between 34,000 and 45,000 KRW. The expected amount to be raised, based on the upper band, is 204.8 billion KRW. Socar used enterprise value to sales (EV/Sales) ratios of companies like Uber, Lyft, and Grab to determine the desired offering price.

Regarding this, CEO Park explained, “There have been criticisms that we received a high multiple compared to overseas mobility platforms, but Socar is the most profitable among all platforms and has shown significantly higher past growth. Also, rental car companies generate operating profit through used car sales, whereas Socar makes margins through vehicle operations, so we judged the business models to be different and did not include rental car companies in the peer group.”

He continued, “60% of the raised funds will be used for M&A of companies capable of expanding the car-sharing business and those with technology and sales networks related to new businesses,” emphasizing, “The voluntary lock-up set by strategic investors (SI) and financial investors (FI) in this offering means that investors believe Socar will continue to grow after listing.”

Meanwhile, Socar will conduct a demand forecast for institutional investors on the 4th and 5th to finalize the offering price, followed by a general subscription on the 10th and 11th. It is scheduled to be listed within this month. The lead underwriter is Mirae Asset Securities, with Samsung Securities as joint underwriter and Yuanta Securities as the managing underwriter.

This content was produced with the assistance of AI translation services.