Toss to acquire 60-percent stake in ride-hailing service provider Tada

Toss founder and Viva Republica CEO Lee Seung-gun

By Lee Kyung-min

Toss, Korea's internet-only bank operated by Viva Republica, will acquire Tada, a mobility startup operated by VCNC. The move will reshape the competitive landscape of the 6 trillion-won ($5 billion) ride-hailing service market, which is dominated by Kakao Mobility with a market share of 80 percent.

Other than the mobility subsidiary of internet giant Kakao Corp., Toss, which has 20 million users of its internet banking services, will face fierce competition with T Map Mobility. T Map, which separated from SK Telecom last year to merge with Uber, is the leader in the smartphone navigation market, with a 75-percent market share.

The ultimate goal for Toss is deeper integration between its financial and mobility services, as shown in its expansion of its businesses from money transfer to payments, insurance and banking.

Toss said Friday that Viva Republica will acquire a 60-percent stake in VCNC, which is owned by Socar. The three signed a memorandum of understanding (MOU) on the stock purchase agreement whereby Toss will buy the shares issued by Tada.

Toss said that the per-share price will not be disclosed, only adding that the entire amount will be spent on the growth of Tada. The purchase agreement will be finalized as early as this month. The new entity will begin service later this year.

The internet-only bank said that it is “seeking growth and innovation via expanding the scope of its financial businesses to incorporate payment and mobility services, while providing greater options to service users and industry workers.”

Tada began operating the ride-hailing business last October and has since been expanding its market share. Its drivers are unable to refuse service, regardless of close proximity to a customer's destination, and they are also exempt from paying commission to the firm.

Toss founder and Viva Republica CEO Lee Seung-gun said that he expects synergy from the collaboration with mobility service providers in a variety of financial services.

“The domestic taxi market reported a combined 12 trillion won in annual sales, half of which is made by ride-hailing service providers. Toss has continued its efforts to provide innovative services to users and the industry since we entered the market, where business models remain unchanged,” he said.

“We have joined hands with Toss to introduce innovative services that cross the boundaries between existing industries,” Socar said.