Startup acquisition is not a new thing in startup world. Big companies acquire small companies all the time and vice versa. Sometimes big competitor buys out small competitors to minimize future threat, sometimes big company buys small startup to keep up the growth but Yello Mobile, the Seoul based Korean startup acquires startups at a rate that breaks all the rules. In 2014 alone it acquired 61 startups and very recently its travel wing Yello Travel acquired 05 new companies.
According to Yello Travel, new startups it acquires include: Eses Global-offers guest house booking; Hikari Global-provides hotel and car reservations in Japan, Hong Kong, and Southeast Asia; TNT Tour-provides tours and other travel packages in Japan, Hong Kong, Macao, and Taiwan; World Travel-provides booking for cities in the Philippines, and YRM-a business-to-business travel agency. These new acquisitions will help Yello Travel to dominate mobile travel market and stay ahead in the competition.
Yello Mobile that focuses in mobile media market in Korea aims to be the number one mobile media company of the country. The company owns around 76 startups that focus and serve the same market putting it into a unique position to rule. Founded in 2012, Yello Mobile acquired companies in fields like mobile marketing and advertising, mobile publishing, mobile shopping, ad and digital marketing, travel and more. As a result it becomes easy for Yello to promote its own startups through its existing network which reduces it promotional budget significantly. At the same, after acquisition of a startup the company employs its own strategy and ensures rapid growth.
Korea is a very interesting market. Due to increasing mobile penetration rate, numbers of mobile targeted startups are increasing but there are few companies that are interested in buying startups which makes it easy for few interested companies like Yello Mobile to buy out startups at a markdown valuation which is difficult in many other markets.
The model Yello is working on is pretty potential. If it can keep the growth up, and build a durable portfolio of startups it can build business out of it by serving ads throughout its network. The potential is especially realistic because Smartphone penetration rate in Korea is almost 75% and the country is going for 5G wireless technologies which will give more people access to faster internet from mobiles. It means more people reliant on mobile for daily purposes.
Recently the company reported that it had 10 million users across its portfolio and it has few real hits in its portfolio. Last year Yello Mobile raised an amount of $100M at a $1billion valuation and there is no sign that Yello Mobile is going to stop eating startups out in the near future.