Kakao Corp., South Korea’s top mobile platform company, has sold a 28 percent stake in its car maintenance service start-up Cardoc to private equity fund Keistone Partners for about 6.2 billion won ($58 million). With the sale, the total shareholding of Kakao came down to 29 percent, but it remains as a majority shareholder in the company, according to sources on Thursday.

A Kakao official said “the sale is an investment decision,” adding that “investments from various institutional investors will be helpful to Cardoc’s development and growth.”

Cardoc was founded in 2013 as a provider of mobile estimation services for car repair. As of end-November 2017, the company’s app hit 950,000 downloads and 380,000 estimation requests worth about 114 billion won.

Market watchers say the sale is a clever move to reinstate Cardoc’s status as a small and medium company from a subsidiary of a large business group facing many antitrust hurdles, while keeping Kakao’s position as the largest shareholder intact.

Cardoc became part of Kakao Group in 2015 when Kakao’s subsidiary Kakao Investment acquired a 58 percent stake in the company. But in September 2017, the country’s antitrust watchdog designated Kakao as a quasi-conglomerate, rendering Cardoc subject to regulations as a company affiliated to a large company. But under the current law, such designation does not apply if the shareholding falls down to below 30 percent.

By Cho Hee-young and Minu Kim

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