The Swing's acquisition of Tada tossed out by majority shareholder

The Swing's acquisition of VCNC, the operator behind van-hailing service Tada, has fallen through as VCNC’s majority shareholder Toss concluded the firm is not a suitable option to run Tada.

A Tada vehicle on the street of Jung District, central Seoul, on June 1 [NEWS1]

The Swing's acquisition of VCNC, the operator behind van-hailing service Tada, has fallen through as VCNC’s majority shareholder Toss concluded the firm is not a suitable option to run Tada.

“We’ve arrived at the conclusion that [e-scooter sharing firm The Swing] isn’t the most adequate company to take over VCNC,” Toss said in a statement Monday. “VCNC recently showed improved profitability through its redundancy plan so we plan to find a more effective solution to manage the company.”

A Toss spokesperson said the fintech firm will run VCNC “for the time being” until a new acquisition deal is brought to the table.

A spokesperson for The Swing confirmed to the Korea JoongAng Daily that the deal collapsed last weekend with Toss stepping in to manage the van-hailing company by itself.

Car rental start-up Socar's former CEO Lee Jae-woong launched Tada with its affiliate, VCNC, in 2018. Socar, which previously owned a majority stake in VCNC, holds the remaining 40 percent stake in VCNC.

“We told Toss that The Swing and Socar arrived at a settlement at the end of last month, with The Swing abiding by most of the requests made by Socar,” a spokesperson for The Swing said. “However, after we told Toss about the settlement, we didn’t hear back for a week, then suddenly Toss tells us last weekend that it wants to scrap the deal and it will manage the company by itself.

“We’re stumped because we were very close to the acquisition and had already linked Tada's services to The Swing app," The Swing spokesperson added.

The Swing reported last month that it will buy a 60 percent stake in VCNC from fintech firm Toss to develop the company into a comprehensive mobility company. The deal was going "in a positive direction," but an obstacle remained in which Socar requested a chunk of The Swing's stake to cover a loan and added interests that VCNC had previously borrowed from Socar.

VCNC is going through intensive restructuring as it has yet to find a new revenue stream after its main moneymaker, the Tada Basic service, was terminated in 2020 due to strong opposition from taxi driver unions. Lawmakers eventually passed a revised bill to outlaw the service.

After the revised bill was passed, online bank Toss took over VCNC in 2021.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]