Seoul, South Korea - Based on information obtained from sources with knowledge of the situation, Socar, South Korea's largest car-sharing platform, is anticipated to commence the initial public offering (IPO) process during the first half of 2022.
The company has reportedly engaged Mirae Asset Daewoo and Samsung Securities Co., Ltd. as the initial public offering (IPO) underwriters.
Some investment banks have estimated the value of Socar to be up to 5 trillion Korean won (equivalent to approximately $4.6 billion).
Nonetheless, industry analysts have cautioned that the valuations presented in proposal documents may not accurately reflect market valuations.
In September 2020, Socar's post-money valuation was 1.3 trillion South Korean won (equivalent to 1.1 billion US dollars), following a Series F funding round of 60 billion South Korean won (equivalent to 53 million US dollars) from Songhyun Investment and SG Private Equity.
The company has experienced a notable increase in user numbers, rising from 0.5 million in 2014 to 6.27 million as of December 2020.
Socar is the market leader in the South Korean car-sharing sector, outperforming competitors such as Green Car, backed by Lotte Rental.
Socar recently reintroduced its car-hailing service, TADA, in collaboration with taxi companies. Moreover, the company has established a presence in the used car sales market with its Casting service, with the objective of capitalizing on the KRW 12.4 trillion (US$10.3 billion) market.
A review of industry trends reveals a notable shift from car ownership to car usage.
This is evidenced by major automakers such as Hyundai Motor Company introducing subscription-based services.
Investment banks are anticipated to reference similar companies, such as Uber and Lyft when estimating Socar's future valuation.
The price-to-sales ratios for these companies have averaged 4.391 and 3.335, respectively.
As Socar prepares for its initial public offering (IPO), market observers suggest that the company must demonstrate robust financial performance over the next 24 months to justify the elevated valuations currently being placed on it.
