After pricing shares below the bottom end of a marketed range, Socar plummeted in its stock market debut.
In the initial minutes of the debut, Socar's shares rose 1.25% from their IPO price of 28,000 won, but then fell to 26,300 won and give the firm a market cap of $652 million.
Socar's IPO offering was cut last week to 102 billion won, giving the car-sharing company a valuation of more than 700 million dollars.
A number of Korean companies have delayed their listing plans due to a slow IPO market in South Korea.
The IPO market is reeling from the global economic downturn and the performance of Socar was attributed to that.
According to the CEO of Socar, the company was pushing ahead with its listing plans because it was confident in its performance and expected to make a profit by the end of the year.
The Korean mobility startup prioritized investment in organic growth with the IPO proceeds rather than waiting for the stock market to recover.
Socar's growth is faster than expected because of the re- opening after the COVID-19 Pandemic. We will focus on mergers and acquisitions and investments in new businesses and technology as the stock market is expected to be tough for the time being.
The company plans to beef up its services and geographic expansion efforts in order to become a mobility super-app with the goal of posting 1 trillion won in revenue by the year 2025. He said it wants to reach 30% or more annual revenue growth.
Socar is the first and only unicorn mobility startup in South Korea.
In March of this year, Socar, backed by SoftBank, and Korean strategic investor SK Inc., received funding at a 1.3 trillion won from the rental car unit of South Korea's Lotte Group. Before its IPO, the startup raised a total of over 300 million dollars.
The lock-up period will allow the company's major shareholders, including SoftBank, to keep their stake.
The 11-year-old firm, which started the car-sharing service with 100 rental cars in Jeju, now manages a fleet of more than 19,000 vehicles. The transportation app will provide all-in-one mobility services. A charging stations service for electric cars is one of the things Socar is building.
Park said in an interview that Socar wants to enter the Southeast Asia market with its new business, fleet management system, B2B service that it plans to begin selling later in the fourth quarter of this year. Socar has built a technology that uses data such as vehicle location and surroundings to support effective monitoring and control systems.
Socar's flagship business has been car-sharing for the past ten years, and if stabilization occurs, it will be a B2B software as a service that guarantees a high profit ratio.
According to Socar, the company has captured 80% of the market share in South Korea, with more than 11 million users and over one million monthly active users.
Socar Malaysia, a 79% stake owned by SK Inc., is one of the companies that the company has set up.
Socar was founded in 2011 by Lee Jae-woong, who co- founded South Korea's largest internet portal operator. VCNC, an operator messaging app for couples, was sold to Socar. Park joined Socar's chief strategy officer and took on the CEO position after Lee stepped down.
Viva Republica, a Korean financial super app operator, bought a majority stake in the ride hailing business of VCNC for an undisclosed amount in October last year.
South Korea's TMap Mobility, whose investors include SK Inc's investment firm SK Square, said Monday it has raised $150.2 million from a bank. Last week, it was announced that the sale talks with MBK Partners had been terminated.
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