Yogiyo’s Acquisition Bidding Attracts Major Korean PEFs and Retailers

Yogiyo, South Korea’s second-biggest online food delivery platform, has attracted around ten preliminary bidders, many of which are domestic retail giants. In particular, Yogiyo has drawn players such as the department store operator Shinsegae and various private equity firms. Some of the investment management companies who raised bids include Asia’s Affinity Equity Partners, US’s Bain Capital, and UK’s Permira.

Notably, Yogiyo’s preliminary tender brought in the country’s largest private equity firm, MBK Partners. The takeover bid for Yogiyo also attracted Yanolja Co., South Korea’s top online travel agency and only ‘unicorn’ travel company. According to Yanolja, acquiring the popular delivery app and its nationwide network could boost its travel services. Yanolja also aims to obtain Yogiyo as part of its plans to become a leading all-inclusive customer service provider.

Before the ten prospective bidders submitted their non-binding offers, they received Yogiyo’s offering memorandum. The private equity firms CVC and TPG Capital also joined the takeover bid. Furthermore, some prospective bidders consist of the country’s major retailers, including Shinsegae and Korea’s eighth-largest conglomerate GS Group. Lotte also participated in Yogiyo’s preliminary bidding process.

Rising Q-Commerce Demand

Statistics Korea’s data indicated that one-person households occupied the largest household share at 30.2%, generating a fast-growing demand for quick commerce, which delivers goods in small quantities to consumers almost instantly. This trend also prompted food delivery service providers to integrate micro-logistics into their platforms. Accordingly, industry officials speculate that Yogiyo could help major retail companies expand their q-commerce capabilities and create synergy with their existing offline stores.

Delivery Hero’s Baedal Minjok Acquisition

In 2020, Yogiyo’s parent company, the Germany-based q-commerce company Delivery Hero, announced its plan to acquire Baedal Minjok. Previously owned by Woowa Brothers Corp., Baedal Minjok (Baemin) is South Korea’s largest food delivery app. Following the plan’s announcement, the Korea Fair Trade Commission (KFTC) issued a conditional approval, enabling Delivery Hero to purchase Baemin. KFTC’s condition requires Delivery Hero to put Yogiyo on sale to prevent monopolization issues.

Deal watchers expect Yogiyo to lower its 2 trillion won ($1.78 billion) price tag due to Delivery Hero’s August deadline. Industry observers also say that Coupang’s extensive investments in Coupang Eats pose challenges to bidders’ attempts to raise Yogiyo’s price. Due to Coupang’s successful NYSE IPO debut, Coupang Eats could compete with larger South Korean food delivery platforms. Currently, Yogiyo holds a 17.9% share in the country’s food delivery market, while Baemin has a 66% stake. On the other hand, Coupang Eats has a 13.6% share, based on a Korean data researcher’s report.