Goldman Sachs eyes Tmap Mobility acquisition by year-end

Goldman Sachs is seeking to acquire a controlling stake in Tmap Mobility, operator of Korea’s leading navigation app, from SK Square by the end of this year, seeing an investment opportunity in its lower valuation and vast trove of mobility data as autonomous driving advances, industry sources said Friday.

For SK Square, SK Group’s investment arm and the largest shareholder of SK hynix, the sale is part of a broader strategy to focus on artificial intelligence (AI) and semiconductors.

The global investment bank is looking to invest between 600 billion won ($450 million) and 800 billion won to secure a 60 to 70 percent stake in Tmap Mobility. It is in talks to buy shares from SK Square, the largest shareholder with a 63.23 percent stake, as well as other financial investors, including Affirma Capital and EastBridge Partners, which each hold 9.83 percent, and KB Kookmin Bank, which owns 6.39 percent.

Tmap Mobility traces its roots to a navigation service launched by SK Telecom in 2002. The telecom operator spun off its mobility business into a separate company in December 2020, and Tmap Mobility became a subsidiary of SK Square the following year. Its navigation app now has more than 15 million monthly active users, while the company’s offerings extend beyond smartphone navigation to AI-powered mobility solutions.

Its navigation system is also integrated into vehicles from most major imported automakers in Korea, including Mercedes-Benz, BMW, Volvo and Tesla.

Industry officials said Goldman Sachs appears to be betting on Tmap's extensive driving and location data accumulated over more than two decades. The data could become valuable as the mobility industry embraces AI and moves closer to autonomous driving.

The data generated by the mobility platform's user base could help develop new AI-powered services and autonomous driving technologies.

The U.S. investment bank appears to see value in Tmap's future growth prospects.

Tmap Mobility recorded revenue of 283.5 billion won and an operating loss of 14.1 billion won last year, but posted its first annual net profit of 25 billion won. It also recorded its first monthly operating profit in June.

These developments come amid Goldman Sachs' growing interest in Asia's mobility sector.

In 2023, it invested 10 billion yen in GO, Japan's leading taxi-hailing platform. Earlier this year, Goldman also joined a VIG Partners-led consortium that explored acquiring a stake in Kakao Mobility, the operator of Korea's largest ride-hailing platform. The discussions, however, did not lead to a deal.

"Goldman Sachs' interest in Asia's mobility market has grown rapidly, drawing on its expertise in IT and AI. An acquisition could give Tmap Mobility greater opportunities to develop new businesses and expand into overseas markets," an investment banking industry official said.

In addition, Tmap Mobility’s valuation has declined from previous levels amid delays to its initial public offering and growing competition, making it a more attractive investment target for Goldman Sachs.

Goldman Sachs declined to comment.

SK Square, meanwhile, is expected to retain around a 10 percent stake in Tmap Mobility after the deal, remaining its second-largest shareholder and continuing to collaborate on AI and data services.

"We are reviewing various options for Tmap Mobility's future growth and will provide details once they are finalized," an SK Square official said.

The potential deal is also drawing attention from the investment banking industry, as it would mark Goldman Sachs' return to Korea's buyout market after nearly a decade.

The bank's last major buyout in Korea was in 2016, when it acquired cosmetics maker Carver Korea alongside Bain Capital and kitchenware company Happycall with EastBridge Partners. It has since focused largely on minority investments, as it reorganized its private equity business and renewed its push into the Asia-Pacific market.