Kakao Mobility, the ride-hailing subsidiary of South Korean messaging and internet giant Kakao, has made its first acquisition to boost its international exposure. It has acquired Splyta London-based startup working with travel, ride-hailing and finance apps to help them build ‘super app’ strategies by integrating other services.
Kakao Mobility has already partnered with Splyt and plans to use the asset to drive global expansion plans in Southeast Asia and Europe. Kakao Mobility currently offers limited services in about 30 markets outside of South Korea: most recently it launched in Guam last year and in Laos earlier this year.
“Splyt and Kakao Mobility’s technology teams have been working together since 2019 to integrate and enable global ride-hailing services for Kakao T users through Splyt’s ride-hailing API platform,” Splyt CTO Stephen Mason told australiabusinessblog.com.
The financial terms of the deal are not disclosed, but there are some signs that it may not have been a super result for this super app enabler.
Splyt says its services are used by more than 2 billion people in 150 countries through clients such as Alipay, Uber, Binance, Grab, Trip.com, Booking.com, Kakao itself and 70 others. But after a flurry of activity in recent years – including raising $33.5 million from SoftbankGrab, AmEx and others, per PitchBook Details – Splyt stopped providing updates about its company in July 2022.
The acquisition includes technology and talent. Splyt has about 30 employees and they will join Kakao Mobility. Key management at Splyt will move to South Korea to continue managing and integrating the team into Kakao Mobility, a spokesman for the latter company said. (Kakao Mobility has about 950 employees.)
It’s not yet clear how Kakao Mobility intends to use Splyt’s technology: using it as a lever to collaborate with a wider network of international partners or using it to expand Kakao Mobility’s own app, Kakao T. which currently has about 32 million registered users.
Kakao Mobility itself is at a crossroads as a company: the company was originally partially spun off from Kakao Corporation in 2017 and is still 58% owned by Kakao. But last year Kakao had to plan shelves to sell some of that interest to a PE company after opposition from drivers and employees. Another plan for an IPO is also currently on hold amid a cool tech stock market.
Other investors in the mobility sector have included Carlyle, TPG, LG and Google, who have invested more than $840 million. A report last year Korean economic daily newspaper notes that Kakao Mobility — which, in addition to ride-hailing, also offers parking locators, navigation, bike rentals, and has worked on autonomous driving — was valued at $6.5 billion.
The emergence of Splyt as a company speaks to a very special time in the on-demand services market. Apps like Grab, Uber, Didi, Lyft, Ola, and many others collectively raised billions of dollars to compete against each other and build networks of gig workers and customers. However, fierce competition on a limited number of services made for a very challenging unit economy, so many of these companies focused on folding more services into those apps to improve loyalty and increase customer spend – hence the so-called “super app “. was born. However, the complexity of integrating different services was a challenge in itself, which is where Splyt stepped in and provided the behind-the-scenes technology to integrate services and reconcile payments between different parties.
That in itself was enough to attract SoftBank as an investor. When it spearheaded a $19.5 million seed round in 2019, SoftBank was a big backer of some of these on-demand companies, and it was also looking for its own entry point into the “super app” fray, and so the investment was seen as a way to help it on both fronts.
But fast forward to today, and many of the companies using these apps, not to mention SoftBank itself, are struggling to grow and justify their lavish investments of recent years. All of that may have spelled splitsville for Splyt, but perhaps also an opportunity for Kakao Mobility to pick up the pieces for its own purposes.
“We will create a new service that innovates the mobility experience of users around the world by incorporating the platform capabilities of Kakao Mobility into the global superapp network that Split built,” said Splyt CEO and co-founder Philipp Mintchin.
“We are delighted to welcome Splyt, the first foreign acquisition [of Kakao Mobility]said Alex Ryu in a statement. “Kakao Mobility will continue to scale our product and accelerate further global expansion through Splyt, which has an unparalleled global competitiveness in mobility service platforms.”