Yello Mobile’s O2O arm has a merry Christmas with $21m funding

The Yello O2O team on the cover of a magazine by accommodation chain Hotel Avia. Photo credit: Yello O2O got an early Christmas present – it announced a fundraise today of US$21 million from venture capital firm Q Capital Partners.

Yello O2O is part of mobile marketing jack-of-all-trades startup Yello Mobile, a South Korean unicorn and a holding company for a multitude of startups in various verticals. Yello O2O is the “online-to-offline” arm of the company, meaning it provides services that are booked online and offered in the real world. For now it focuses on accommodation, healthcare, and payments.

Yello O2O will offer services in a whole new sector through strategic acquisition plans.

The company will use the funding to boost its accommodation and healthcare offerings. It will also seek to offer services in a whole new sector through strategic acquisition plans, although the company says those plans aren’t specific yet.

(Update, 24/12: This story has been updated with some details from Yello O2O. It has also been amended to reflect that Future Stream Network has already listed on the KRX.)

A company spokesperson tells Tech in Asia that Yello O2O expects to record US$167 million of annual revenue this year. As of Q3 2016, the company posted US$119 million in accumulated revenue and US$9.3 million in operating profits. The spokesperson says Yello O2O has been in the black for nine consecutive quarters.

Yello Mobile, the holding company behind Yello O2O, claims to be valued at US$4 billion by investors.

Founded in 2013, the company has quickly grown to a prominent position in South Korea’s ecosystem. It went on a shopping spree in the past two years, acquiring several startups across Asia and building up a fleet of marketing, travel, and media companies.

However, Yello Mobile has been criticized for its complicated shareholding structure. Its valuation has also been questioned by industry watchers and players. It was reported in August that the company plans to streamline things by merging some of its subsidiary companies.

The same report said that Yello Mobile is gearing Yello O2O for an IPO in the near future. The company confirms its IPO plans but doesn’t offer any specifics. Yello Mobile’s advertising platform Future Stream Network went public on the Korea Exchange on October 5, the spokesperson clarifies.

Converted from South Korean Won. US$1 = KRW 1,203.