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Anchor Equity Partners, KKR and management acquire controlling stake in Groupon’s Ticket Monster

Private equity investor Anchor Equity Partners and investment firm KKR are to acquire a controlling stake in South Korean mobile commerce company Ticket Monster (TMON) from Groupon.

Anchor and KKR, in conjunction with TMON’s management, will jointly acquire a controlling stake in TMON and will inject new capital into the company to help fund its future growth opportunities. Anchor and KKR will hold equal stakes in the company. Some of the world’s largest pension, sovereign wealth funds and institutional investors, including the Canada Pension Plan Investment Board and Pavilion Capital, will also be participating as investors in this transaction. Groupon, which acquired TMON in January 2014, will retain a fully diluted 41 per cent minority stake in the company. The investment is based on a USD782 million fully diluted valuation of TMON. KKR and Anchor will work closely with TMON’s co-founder and CEO Dan Shin and the management team to grow the business.

“We are extremely excited to work with such world-class partners. KKR and Anchor not only bring global experience in the retail and technology sectors, but they are also experienced local partners with strong business expertise in South Korea,” says Shin. “We are thrilled to be working with distinguished partners who share our vision for growth and offer significant pools of capital in support of TMON’s initiatives. With their help and investment, this company will have greater opportunities to attract new customers and expand into new businesses.”

Groupon CEO Eric Lefkofsky said the partnership strengthens an already powerful local brand.

“Ticket Monster demonstrates the global appeal and power of a mobile commerce marketplace,” says Lefkofsky. “With additional support from KKR and Anchor, TMON will be even better resourced and positioned in the Korean market.”

TMON is a pioneering mobile-first, e-commerce platform that provides a premium online and mobile shopping experience to customers across South Korea. TMON has already become one of Korea’s largest online retail marketplaces and offers a curated selection of discounted items across three main categories: Goods, which includes clothing, household and fast-moving consumer goods; Local Services, including restaurant, entertainment and leisure coupons; and Travel, encompassing discounted transportation tickets, hotel stays and vacation packages.

TMON’s business leverages key consumption and technology trends in South Korea, a market which is experiencing a rapid shift from offline-to-online and PC-to-mobile retail. South Korea’s e-commerce market has experienced a CAGR of 16 per cent since 2008, stemming from consumers’ increasing focus on convenience, selection and value items, according to South Korea’s National Statistics Office. Mobile commerce, led by application-based technology, is expected to achieve 40 per cent market penetration by 2017, up from 2 per cent in 2011, according to Mirae Asset research. This complements steady mobile growth in South Korea due to the country’s extensive telecom and logistics infrastructure.

TMON’s mobile application had been downloaded more than nine million times as of 31 December, 2014. About 70 per cent of TMON’s customers complete their transactions via mobile.

“We believe that South Korea represents a sizeable and attractive market opportunity given the clear shift by consumers towards mobile commerce, convenience and value goods,” says Stephen Ko, Managing Director of KKR Asia, and Sae Wook Wi, Partner of Anchor.

“We are excited to invest in this fast-growing sector and provide greater financial resources to Ticket Monster. The strong combination of a well-resourced shareholder base and an innovative management team puts TMON in pole position to lead the market with dynamic, creative services and drive value for consumers. We look forward to working with Dan, his team at TMON and Groupon during an exceptional time for mobile commerce in Korea,” say Ko and Wi.

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