Korea’s Yello Mobile raises $30m, valued at $4b and profitable

Yello Mobile, a Korean company that’s weaving together a mobile marketing network by acquiring tons of Asian startups, has raised US$30 million from Japanese financial group (and Softbank spin-off) SBI Holdings, it announced in a press release.

The company claims to be valued at US$4 billion following its US$43 million funding round in December 2015. That meant the latest slate of investors only owns 1.08 percent of the business following the investment, which is a tiny stake.

This latest cash infusion by SBI is a part of that round, bringing the total to US$73 million. It’s still accepting more investors into the round.

Mobile advertising isn’t Yello’s only preoccupation. It’s involved in what it calls SMATO: shopping, media, adtech, travel, and “offline-to-online,” a curious reversal of the industry acronym O2O, or online-to-offline.

What exactly does offline-to-online mean though? Scanning Yello’s website, this category seemingly refers to apps that modernize traditional businesses. Parked under this group are CRM systems for hospitals, services aggregators, payment systems, and technology consultancy.

To build its business, Yello embarked on the unique strategy of acquiring 61 startups for cheap in 2014, and its appetite continued growing beyond that.

The whole appears to be greater than the sum of its parts. Yello made US$82 million and was EBITDA-positive in Q3 of 2015, which would bring annual revenues into the hundreds-of-millions range. In 2015, the company’s revenue in the first three quarters rose 338 percent from the same period the year before.

Yello gave a breakdown of its revenues by business units for Q3 2015 (table below in Korean Won). Its offline-to-online segment appears to be doing great, while it’s bleeding money on its shopping and media units, though the company has said it’s because of spending on aggressive expansion.