SKT's mobility unit seeking Google, Tesla investment

By Kim Yoo-chul

After winning a $150 million investment from Uber, SK Telecom's (SKT) newly independent mobility business unit ― T-Map Mobility ― is seeking additional financial backing from top-tier tech companies before its listing on the Korean stock market.

Sources knowledgeable with the matter said Tuesday the country's top mobile carrier approached Google and Tesla in terms of getting them as strategic investors in a recent preliminary session.

“SKT invited Google and Tesla as strategic investors during the latest early funding round. In a letter SKT sent them, the mobile carrier has elaborated the specifics of expected returns and outlined brief plans over the course of the next few years,” one official said. Plus, SKT invited major private equity funds (PEFs) including Carlyle Group, Affinity Equity Partners (AEP), IMM PEF, SKS PEF, Mirae Asset-Daewoo PE and Daeshin PE for the early stages of the funding round, sources said.

Regarding the possibility of winning back Google and Tesla, officials at SKT said it's been eyeing extra investments beyond Uber from a lot of foreign investors to move forward with T-Map Mobility's listing. But they declined to specify any companies, or whether the recent funding round got any positive responses from the investors it approached.

SKT separated the mobility business unit to create T-Map Mobility after the company's shareholders approved the spin-off plan. The newly established entity will be launched on Dec. 29.

In a conference call upon announcing its third-quarter earnings results, SKT executives clarified the company's intention to initiate an “exit program” for financial investors earlier than expected once T-Map's initial public offering (IPO) process is done as planned.

SKT was hoping for T-Map's estimated enterprise value to break at least 1 trillion won with the carrier wishing for financial investors to collectively own between 20 percent and 30 percent of equities in the soon-to-be-launched unit.

“The key condition to winning back big-name foreign investors is how SKT guarantees investors a return ratio to invest in T-Map Mobility,” another source added.

The creation of T-Map Mobility is aimed at exploring opportunities in the booming taxi-hailing market in Korea in accordance with SKT's efforts to cut its heavy reliance on less-profitable and saturated telecommunications-oriented businesses. T-Map is the largest mobility platform developed by SKT in Korea with 13 million monthly active users.

But because of the rise of services such as Kakao's mobility services, some investors were worrying over the sustainability of SKT's taxi-hailing and relevant services in terms of continued growth.