|Logo of Yogiyo|
Ahead of the imminent selection of a preferred bidder for Yogiyo, attention is now on who will take over Korea's second-largest food delivery application.
However, it is said that none of the participating bidders seem to show strong interest in purchasing the company, the sale of which will be managed by Morgan Stanley.
According to the investment banking industry, various companies, ranging from conglomerates and unicorn companies to large private equity firms (PEFs), including Lotte, Shinsegae, Yanolja and Affinity Equity Partners, have shown interest in purchasing Yogiyo, as signaled through receipt of an information memorandum regarding the company.
Yet with concerns over the already-heated competition with the country's top food delivery platform Baedal Minjok, the sale seems to be losing its luster in terms of potential profitability.
Parties interested in the deal expressed concerns over possible structural changes in the app's fee-based business model, further marketing costs, as well as future full-on competition against Baedal Minjok. Currently, Baedal Minjok is estimated to have nearly 60 percent of the food delivery market share, while Yogiyo takes up about 30 percent.
The estimated price of 2 trillion won ($1.78 billion) is also said to be burdensome to potential bidders, with the market's expectation that the final bidding price will go down from the current valuation.
So far, leisure application Yanolja, which is preparing its own IPO later this year, has the most interest in taking over the food delivery platform, a move which could signal a strategy to expand their business outreach into a "super application." But the deal is said to be too big for a single company to handle.
The sale of Yogiyo began, as the Fair Trade Commission (FTC) ordered Delivery Hero Korea late last year to sell Yogiyo due to concerns over market monopolization, after giving the green light to the German company's acquisition of Baedal Minjok.