Korea’s three biggest food delivery apps merge

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Korea’s three biggest food delivery apps merge

Korea’s three largest food delivery apps merged in a $4-billion deal that is the biggest in the local IT industry’s history.

The industry’s top food delivery app, Baedal Minjok, was bought for $4 billion by the multinational food delivery operator Delivery Hero, which also owns Korea’s second-biggest delivery app, Yogiyo, and its third-largest, Baedaltong.

The German-based Delivery Hero operates food delivery apps in more than 40 countries.

Currently, Baedal Minjok - usually referred to as Baemin - holds a 55 percent share of the market while Yogiyo has 34 percent and Baedaltong 10 percent.

While the apps will operate independently, the merger makes Delivery Hero the dominant food delivery operator in Korea.

Korea is estimated to be the world’s fourth-largest market for food delivery services, worth around $6 billion, according to Hana Financial Investment.

According to Baemin’s operator Woowa Brothers on Friday, the German company will buy an 87 percent stake of Baemin owned by investors including Goldman Sachs, Singapore’s GIC, Hillhouse Capital, Albatross Venture and Sequoia Capital China.

The remaining 13 percent that is owned by Baemin’s top executives, including Woowa founder and CEO Kim Bong-jin, will be swapped for shares in the German company.

Baemin said the swap will make Kim the largest stakeholder in Delivery Hero among the German headquarters’ executives.

Baemin and Delivery Hero also announced a 50-50 joint venture in Singapore dubbed Woowa DH Asia.

The joint venture will be headed by Baemin’s Kim.

The new company will oversee the operation of the German company’s business in 11 Asian countries including Hong Kong, the Philippines, Singapore, Taiwan, Vietnam and also Korea.

“Having started out as a Korean company, Baedal Minjok managed to reach No.1 in the local market,” Woowa Brothers said in the statement. “However, we are also facing threats from IT giants entering the market not only in Korea but also foreign competition.”

Woowa Brothers said the merger will allow it to increase its foothold in other Asian markets.

Hana Financial Investment projected the global online food delivery market to grow at an annual rate of 15 percent from its current $85 billion to $200 billion by 2025.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]
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