Macquarie-backed Korean unicorn Yello Mobile on verge of collapse: Report

Photo from Yello Mobile's Facebook page

South Korean mobile services startup Yello Mobile, one of the country’s first official unicorns, is on the verge of collapse as unpaid loans and lawsuits mount and further wreck its financial health, according to a report by The Investor.

Yello Mobile, which has raised $187.2 million in four funding rounds since November 2014, was worth more than $4 billion at its peak, with revenue soaring to W527 billion ($467 million) in 2017. The company, however, posted operating losses for consecutive years until 2017, when operating profits hit a mere W18.9 billion ($1.7 million).

According to the report, Yello Mobile’s CEO Lee Sang-hyok is facing numerous lawsuits for borrowing excessively from partners and affiliates without settling the obligations. These loans were reportedly used to acquire more startups. The company has said that it is trying to pay back the loans.

Additionally, the startup’s investors DS Asset Management and Alpen Route are demanding to be paid back W10.4 billion ($9.2 million) and W16.9 billion ($15 million), respectively. DS Asset invested W10 billion ($8.9 million) in Yello Mobile in 2013.

Its other investors include Macquarie Capital, SBI Investment, and Formation 8.

Founded in 2012, Yello Mobile operates businesses across shopping, media (content), advertising (marketing), travel and O2O (online to offline platform).

Yello Mobile’s “brink-of-collapse” story is not unique in the startup space. Recently, Chinese media reported that Ai Wu Ji Wu (Iwjw), a Chinese startup that operates an online platform for house rental services, has gone into liquidation after raising a total of $305 million in funding since its inception in 2014.

Iwjw’s big-ticket investors include GGV Capital, Temasek Holdings, Hillhouse Capital, and Morningside Group.

In December, Alibaba-backed Chinese bike-sharing startup Ofo was reported to be considering applying for bankruptcy due to “immense” cash flow problems.

Also Read:

S Korea’s Yello Mobile raises $10m from Macquarie Capital to fuel expansion plans 

Korea’s Yello Mobile acquires Indonesian adtech co Adplus

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.