Korea’s top car-sharing app maker ‘Socar’ has successfully secured a series B investment from SK and Brookside Capital part of Bain Capital for an amount of US$56m (KRW 65b).
In October 2014, Socar secured a Series A investment of US$15.5m (KRW 18b) which was used to secured the required vehicle and parking infrastructure which in turn paved the way for growth and offering of new services. As a result of this earlier investment, Socar has achieved some amazing growths within a year, including: increase of total vehicles numbers from 1,400 to 3,200 (+229%); increase in total serviced locations from 800 to 1,800 (+225%); and increase in total user numbers from 300 thousand to 1.3 million (+433%).
Behind the success of the car sharing businesses is the global paradigm trend of the general population shifting preferences from vehicle ownership to sharing. This global trend of shared mobility has resulted in remarkable growths globally but the market advancement in Korea has been particularly fast given Korea's high population, mobile connectivity and advanced IT infrastructure. In face, the car sharing market in Korea is advancing 3 – 4 years faster than that of the US or Japanese markets. The O2O (online to offline) technologies that Socar uses for its sharing economy platform has great potential to be expanded into other Asian countries.
Global accounting consultants, Price Waterhouse Cooper (PwC) estimates that in the next 10 years the global sharing economy market will be worth a staggering US$335 billion. Frost & Sullivan estimates that by 2020 the global population of car sharing users will increase by 26 million adding a further US$8.6 billion to the economy. In Korea the car sharing market is expected to generate US$860 m (KRW 1t) within the next 5 years.
The growth in the car sharing does not merely increase convenience but also leads to positive impacts socially and environmentally. The sharing of a single vehicle removes the requirement for 15 vehicles from the road. Using this relationship, an increase of 100 thousand share vehicles will remove 1.5 million vehicles which is equivalent of 10% of registered vehicles in Korea.
With this new investment, Socar plans to develop their on-demand-mobility platform. This platform will enable any car sharing request within Korea to be fulfilled within 10 minutes. In order to increase users sufficient to sustain an on-demand platform, the company is also looking at making strategic acquisitions. The investment involvement of SK in the US$56m investment has secured the company a 20 per cent stake in the Socar.
Ji Man Kim from Socar commented, "Globally the integration of software within vehicles is advancing rapidly, led by the likes of Google, Uber and Tesla. An era of on-demand-mobility is rapidly approaching”. “Socar aims to be the leader in this mobility era with a platform that provides practical and easy to use service for our users”.
