Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

It was announced this morning that <a href="https://www.smartkarma.com/entities/sk-telecom-co-ltd-bbccd86c-474d-4a4d-946d-10e911a225a2" target="_blank" data-smartkarma-citation="entities:395:1" rel="noopener">SK Telecom (017670 KS)</a> plans to spin-off its mobility business and potentially partner with <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a> to launch a multi-service mobility platform. Following this news, shares of SK Telecom declined 4.7% to 231,000 won. This move follows the recent funding received by Socar last month which put Socar as the next Unicorn in South Korea. For further details, see our recent insight <a href="https://www.smartkarma.com/insights/socar-the-biggest-car-sharing-platform-in-korea-becomes-the-next-unicorn" target="_blank" data-smartkarma-citation="insights:44064" rel="noopener">Socar: The Biggest Car-Sharing Platform in Korea Becomes the Next Unicorn</a>.

It was announced this morning that SK Telecom (017670 KS) plans to spin-off its mobility business and potentially partner with Uber (UBER US) to launch a multi-service mobility platform. Following this news, shares of SK Telecom declined 4.7% to 231,000 won. This move follows the recent funding received by Socar last month which put Socar as the next Unicorn in South Korea. For further details, see our recent insight Socar: The Biggest Car-Sharing Platform in Korea Becomes the Next Unicorn. 

SK Telecom Plans to Spin Off Mobility Business & Partner with Uber

Equity Capital Markets

Root Inc is getting ready to complete its IPO in the NASDAQ exchange in the next few weeks. Root Inc is an insurtech company that operates through a mobile app that uses smartphone technology, telematics, and data science to provide auto and home insurance. Since the founding of the company, Root has raised a total of<a href="https://www.insurancejournal.com/news/national/2020/10/06/585407.htm" target="_blank" rel="noopener"> $523 million</a> in funding. It was last valued at $3.65 billion in September 2019 in a round led by ST Global and Coatue. Root is targeting about <a href="https://www.businessinsider.com/root-insurance-us-based-insurtech-filed-for-ipo-2020-10#:~:text=The%20US%2Dbased%20insurtech%20has,currently%20available%20in%2029%20states." target="_blank" rel="noopener">$6 billion</a> valuation in this IPO. You can read Root Inc's S-1 <a href="https://www.sec.gov/Archives/edgar/data/1788882/000162828020014305/roots-1.htm" target="_blank" rel="noopener">here.</a> 
Surging revenue &amp; rapid improvement in net margins - The company's revenues have exploded higher in the past three years. In 2019, the company generated revenue of $290.2 million (up 570% YoY) while its total operating expenses increased by 393% YoY. A combination of a much higher revenue growth rate than operating expenses has resulted in a rapid improvement in net margins, which improved from -159.6% in 2018, -97.3% in 2019, and -58.9% in 1H 2020.
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Root Inc's exploding revenue growth and improvement in the reduction of net losses is very impressive, in the ranks of <a href="https://www.smartkarma.com/entities/snowflake-inc" target="_blank" data-smartkarma-citation="entities:29254:1" rel="noopener">Snowflake Inc (SNOW US)</a>. 
Although Snowflake and Root compete in different industry segments, both are SaaS companies with exceptional sales growth and significant operating leverage going forward. Similar to Snowflake, the word "WOW" came to my mind in reading through Root's IPO prospectus. Root Inc could be one of those exceptional, highly disruptive SaaS companies that even the great value investors such as Warren Buffett could inject significant amounts of capital (similar to Snowflake).
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Root Inc is getting ready to complete its IPO in the NASDAQ exchange in the next few weeks. Root Inc is an insurtech company that operates through a mobile app that uses smartphone technology, telematics, and data science to provide auto and home insurance. Since the founding of the company, Root has raised a total of $523 million in funding. It was last valued at $3.65 billion in September 2019 in a round led by ST Global and Coatue. Root is targeting about $6 billion valuation in this IPO. You can read Root Inc's S-1 here. 
Surging revenue &amp; rapid improvement in net margins - The company's revenues have exploded higher in the past three years. In 2019, the company generated revenue of $290.2 million (up 570% YoY) while its total operating expenses increased by 393% YoY. A combination of a much higher revenue growth rate than operating expenses has resulted in a rapid improvement in net margins, which improved from -159.6% in 2018, -97.3% in 2019, and -58.9% in 1H 2020.

Root Inc's exploding revenue growth and improvement in the reduction of net losses is very impressive, in the ranks of Snowflake Inc (SNOW US). 
Although Snowflake and Root compete in different industry segments, both are SaaS companies with exceptional sales growth and significant operating leverage going forward. Similar to Snowflake, the word "WOW" came to my mind in reading through Root's IPO prospectus. Root Inc could be one of those exceptional, highly disruptive SaaS companies that even the great value investors such as Warren Buffett could inject significant amounts of capital (similar to Snowflake).


Root Inc IPO Preview - The Next Snowflake?

United States

Root, Inc. of Ohio operates as a technology company in the insurance industry. The Company offers mobile telematics and technology platform to segment individual risk based on complex behavioral data and a customer experience to make pricing decision and grow business. Root serves customers in the United States.

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Root /OH (ROOT US)

SK Telecom Plans to Spin Off Mobility Business & Partner with Uber

It was announced this morning that SK Telecom (017670 KS) plans to spin-off its mobility business and potentially partner with Uber (UBER US) to...

Douglas Kim

Root Inc IPO Preview - The Next Snowflake?

Root Inc could be one of those exceptional, disruptive SaaS companies that even the great value investors such as Warren Buffett could inject...

Douglas Kim

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