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  1. KT is selling its freight transportation subsidiary, Lolab, which operates the 'Brokarry' platform. The buyer is the logistics company 'Teamfresh,' which established Lolab in joint venture with KT. Last year, KT seemed serious about this market, buying up a large number of trucking licenses. What happened to KT after the appointment of the new CEO Kim Young-seop last year? We have summarized the opinions of stakeholders in the freight transportation market that were competing with KT Lolab.
  2. The best way to confirm the rumors circulating in the market is to ask the parties involved in the acquisition directly. Connectors contacted Lee Seong-il, the CEO of Teamfresh, who acquired Lolab. We were able to hear the full story behind the acquisition decision. Along with this, we found out what specific synergies Teamfresh and KT can gain through the Lolab M&A.
  3. Stakeholders in the freight transportation platform expressed regret over KT's decision. The freight transportation platform market has been the graveyard of numerous major corporations in the past. With KT stepping back, there are concerns that the industry might relive its past troubles. Some say that KT's sale of Lolab was a pre-planned step. Connectors looked into this evidence.
  4. Anyway, Lolab is not disappearing; the operator is simply changing. Brokarry will continue to function as a platform. KT remains on the list of major shareholders of Teamfresh, so it will still be able to exert indirect influence. Nevertheless, the industry predicts that the difficulties facing freight transportation platforms will continue. What are these challenges that even substantial capital and advanced technology cannot overcome?

CHAPTER 1
KT Steps Back from Telecom Transport Platform Competition

KT is selling its logistics subsidiary, Lolab, known for operating 'Brokarry', a platform that was among the freight transportation platforms of the three major telecommunications companies alongside T map Mobility’s T map Cargo and LG Uplus's Freight Connect. Up until last year, Lolab was actively enhancing its freight transport business by purchasing a significant number of commercial license plates, but suddenly decided to sell the business, drawing industry attention. Interestingly, the acquiring entity this time is Teamfresh, a logistics company that was established as a joint venture with KT, with Teamfresh investing 20% equity in Lolab.

Teamfresh's major shareholder list disclosed on April 9, 2024, shows KT as the second-largest shareholder, following CEO Lee Seong-il. KT holds an 11.42% equity stake in Teamfresh. ©DART

It is also a logistics company that has received investment from KT. Lolab announced that it would conduct the sale through an exchange of shares with Teamfresh at a ratio of 1:0.01444, and starting from May 1st, Lolab is scheduled to become a subsidiary of Teamfresh. The reasons for the sale and acquisition, as stated by both companies, are "to utilize business synergies to enhance operational competitiveness." Teamfresh expects not only to expand its business scale with the acquisition of Lolab but also to digitalize logistics through Lolab's technology and talent. Until now, media reports on KT's sale of Lolab have generally not deviated from these explanations.

However, the logistics industry has interpreted KT's sale of Lolab as a step that was practically planned following the appointment of the new CEO, Kim Young-seop, last year. Of course, KT will continue to exert influence as a shareholder of Teamfresh after the sale, but explaining this merely as 'creating synergy' seems quite complex and intricate, with various other circumstances intertwined. This content summarizes how stakeholders in the logistics industry, including freight transport platforms and transportation companies competing with Lolab, view KT's sale of Lolab. Furthermore, we heard directly from Lee Seong-il, the CEO of Teamfresh, about the past actions of KT Lolab, the reasons behind the successful acquisition deal, and the specific synergies Teamfresh expects to create through the acquisition of Lolab.

CHAPTER 2
Was Lolab's Fate Predetermined?

Rumors had been circulating in the freight transportation industry since last year, well before the sale of Lolab was announced. With the appointment of Kim Young-seop as the new CEO of KT in August of last year, there was talk that Lolab could be significantly impacted depending on the new CEO's approach to profitability. As 2024 began, KT continued its restructuring efforts, and the sale of Lolab was seen as part of this ongoing process, according to industry insiders competing with Lolab.

“I heard internally at KT that there was skepticism about the logistics business. Given that freight transportation doesn't yield immediate results compared to the amount invested, it fell out of favor especially with the change in management. Particularly in the freight transportation market, significant cash flow is required to navigate both the visible and more obscure aspects of the industry, which was seen as a burden. It seems more likely that KT decided to streamline its investments towards AI and 6G technologies rather than continue with Lolab. Selling Lolab to Teamfresh, a stakeholder with clear interests, was probably seen as the smoothest way to handle this divestiture,” said Mr. A, a representative from a domestic freight transportation brokerage platform.