이 기사는 2021년 03월 19일 10:32 thebell 에 표출된 기사입니다.

Delivery Hero has started to sound out potential buyers for its South Korean unit, Yogiyo, with the positive long-term outlook of the food delivery industry expected to boost investor interest in the company.

Morgan Stanley, which manages the sale process, recently sent out a teaser to prospective buyers, such as strategic players and private equity firms, industry sources said. Confidential information packages will likely be dispatched soon to those who have shown interest. A detailed timeline for the sale has not been set yet.

Yogiyo recorded earnings before interest, tax, depreciation and amortization (EBITDA) of 47 billion won ($41.8 million) in 2020, a significant turnaround from the previous year’s negative EBITDA of 60 billion won, according to the teaser.

The company expects its profitability to continue to improve in coming years, with the country’s food delivery market expected to grow at a fast pace and more consumers turning to food delivery apps to order meals online.

Between 2017 and 2019, the domestic food delivery market grew nearly 20% in transactions, from 14.7 trillion won to 17.62 trillion won, according to data from the Korea Fair Trade Commission. Orders via food delivery apps accounted for only 17% in 2017, but two years later the share jumped to 53%, equivalent to 9.3 trillion won.

The country’s food delivery app market is believed to have surpassed 10 trillion won last year, with the Covid-19 pandemic boosting the demand for online meal delivery. This rapid growth aligns with a broader trend in Asia. Delivery Hero’s Asia operations recorded gross merchandise value of 5.21 billion euros last year, up more than 120% from a year earlier. The number of orders also nearly tripled from 227 million to 667.7 million in the same period.

Yogiyo has maintained a strong relationship with merchants and riders, as well as has leadership with years of experience, the company said. It also plans to strengthen its research and development, with plans to expand the team of developers to 1,000 over the next three years.

“Everybody knows the growth potential of the food delivery market, and it is true that Yogiyo is the second largest player,” an industry insider said. “But what potential buyers will focus on is whether Yogiyo has its own competitive advantage to defend its position from competitors such as Coupang.”

With a roughly 30% share, Yogiyo is the second largest player in the country’s food delivery market, after rival Baedal Minjok, which dominates the market with a share of about 58%. Baedal Minjok was acquired by Delivery Hero earlier this month. (Reporting by Hee-yeon Han)