Japanese technology group SoftBank is in talks to buy a 10 per cent stake in Yanolja, a leading South Korean hotel booking platform, ahead of the company’s expected US listing, people familiar with the matter said on Friday.
The deal, in which SoftBank’s Vision Fund is likely to invest about Won1tn ($870m) in Yanolja, is expected to be signed next week, according to local media.
“Yanolja will soon receive substantial investment from SoftBank. The talks are in the final stages,” said one of the people familiar with the matter.
The deal, if completed, would mark SoftBank’s second-biggest investment in South Korea following its $3bn stake in Coupang, the country’s leading ecommerce player. Coupang’s US listing pushed SoftBank to record profits last year, as the South Korean company’s valuation briefly exceeded $100bn.
The investment in Yanolja comes as SoftBank, led by billionaire founder Masayoshi Son, faces setbacks in China, where regulators have announced an investigation into data security concerns at Didi Chuxing.
SoftBank’s Vision Fund is the largest shareholder in the Chinese ride-hailing platform, whose New York-listed shares have lost more than a quarter of their value in the past week. The Japanese group is also an investor in Full Truck Alliance, which is among US-listed companies being investigated by China’s data watchdog.
Analysts said the regulatory crackdown on Chinese tech companies could prompt the Vision Fund to step up investments elsewhere. In South Korea, Coupang is also facing public scrutiny over its business practices and work conditions.
The SoftBank investment would probably accelerate Yanolja’s push for a US listing as early as 2023 to fund its expansion into other hospitality services, the people familiar with the matter said.
“If they get the SoftBank investment, they are likely to pursue a Nasdaq listing, rather than a domestic IPO,” said one of the people.
Yanolja was unavailable for comment. The Vision Fund was not immediately available for comment.
The injection would also make Yanolja, which means “Hey, let’s play” in Korean, the country’s latest billion-dollar start-up. The booking platform has expanded rapidly since its establishment in 2005 and posted its first operating profit last year despite coronavirus pandemic-related travel restrictions. It reported a Won16.1bn operating profit in 2020 on revenue of Won192bn.
Yanolja, which hosts about 26,000 hotels in 170 countries, holds ambitions to become a global travel platform akin to Airbnb and Hotels.com. The company is accelerating its growth in other hospitality services, including leisure bookings and developing software to help partner hotels automate their operations.
In 2019, Yanolja received a combined $180m investment from Singaporean sovereign wealth fund GIC and US online travel agency Booking.com. It also acquired ZEN Rooms, a budget hotel start-up in south-east Asia, and India-based eZee Technosys, the world’s second-largest property management system provider.
SoftBank’s Vision Fund 2 has invested in two other South Korean companies this year, pouring $160m into Iyuno-SDI, a media and entertainment localisation firm, and $175m into Riiid, a learning platform that uses artificial intelligence.