Before the deal is sealed it must undergo an antitrust review since Delivery Hero also owns Yogiyo, which is Baemin’s biggest rival. Delivery Hero acquired a majority stake in Yogiyo in 2014.
Delivery Hero is currently worth more than 11 billion euros ($12 billion) after listing at a value of 4.4 billion euros two and a half years ago, according to Reuters. With Baemin, Delivery Hero will have a bigger presence in Asia.
“The (food) delivery market has been flooded with gigantic Japan-backed capital and influential online platforms, leading Woowa to factor in partnership as a survival strategy,” a spokesman at Woowa Brothers told Reuters.
The deal would give Delivery Hero an 87 percent stake in Woowa, CityAm reported.
“The Korean food delivery market is still in the very early stages of development, and offers vast opportunities to grow the customer base and expand into adjacent on-demand services,” Woowa founder and chief executive Bongjin Kim told CityAm.
Kim said the partnership would “help achieve economies of scale to effectively compete against global and domestic IT giants.”
South Korea is the world’s fourth-largest market for online food orders, CityAm reported. UberEats left South Korea earlier this year.
The market in South Korea is $5.9 billion — more than double since 2014 — trailing only China, the U.S. and U.K., reports said. The South Korean market is also bigger than the Japan and German markets combined, according to Euromonitor, which also predicts the market will be $9 billion by 2023.
Baemin started in 2014 as an app-based chicken delivery business. Now, its motorbikes are everywhere in Seoul, with numerous restaurants taking orders online for delivery.
While venture capital funding used to be a struggle in Korea, it has now “become a startup target for many international funds.” Korean startups also had a hand in recent blockchain development. Overall, the increased funding has led to seven unicorn startups, according to the Crunchbase Unicorn Leaderboard.
In other news about South Korea, a pilot-testing program for open banking started in October. The South Korean government said it was going to run the pilot phase and assess the system and its performance, as well as make adjustments as necessary. The system is expected to be released to FinTech firms by (Wednesday) Dec. 18.